The rise of social media finance advice

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Social media is awash with financial advice, but lots of it is questionable. Dave Old, Masthaven’s Head of Compliance, discusses the value of reputable, regulated advice and how to spot that something isn’t quite right…
 
According to some parts of our social media landscape, making money is a breeze. From two-minute cryptocurrency videos on YouTube to so-called ‘finfluencers’ on Instagram and TikTok, there’s been a surge in financial content on social media platforms in the past few years.


 
But questions abound as to how much this content – or advice – is to be trusted. While it’s true there are genuine sources of good quality financial advice available on social media, it’s also the case that many of these purveyors of financial wisdom know little about their subject matter, are unregulated and aren’t clear with you about what might happen to your money.
 
In a space where anyone can call themselves anything, social channels have become fertile grounds for misinformation – or just plain bad advice. After all, there are no special requirements to setting up as a finfluencer – anyone can do it.
 
So how can you make sure you can trust what you see? Here are some things to look out for.
 
Proper expert – or just a personality?
There are no requirements to be regulated in order to offer financial advice on social media, nor are there any specific qualifications, knowledge or skills. Ask yourself: Who is this person? A bone fide expert – or just a social media personality?
 
Beware of popular videos
It’s tempting to think that videos that have been watched millions of times must contain useful and accurate information. But it may not be the case. Indeed, the video’s creator may have deliberately employed tactics to bump up viewer numbers for their content. Approach with a healthy degree of scepticism.
 
Watch for scams
Fraud is seemingly everywhere, especially on social media. While many pieces of financial content aren’t scams – they’re just ill-informed – some are. Be very wary of get-rich-quick schemes or investments that promise very high returns. We’ve got some other tips for staying safe online here.
 
The value of regulated advice
On the flipside, it remains the case that ‘old-fashioned’ financial advice from an adviser, while likely to be far less sexy than what we see on social media, is likely to be a better option. They are likely to be properly regulated with lots of experience in guiding people towards what’s best for them.

 
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