Social media users want platforms to tackle misleading financial advice

Many of us turn to social media for financial tips and advice - but some say platforms aren’t doing enough to make sure it’s of a high standard.

Research by Queen Mary University found that about 40% of those polled use platforms like Instagram, YouTube and TikTok to get guidance on money matters.

But nearly nine in ten of the posts looked at by researchers were rated as low quality, with many sharing misleading information or coming from people who aren’t qualified to give financial advice.

Users want action from social media platforms

Unsurprisingly, many people who turn to financial advice want more to be done to make sure they’re getting the right information.

Among the ideas put forward were:

• asking social media platforms to share links to official sources
• ensuring content creators are open about their qualifications
• telling financial influencers (or “finfluencers”) to be transparent about any conflicts of interest, such as whether they’re being paid to promote a particular product
• requiring content creators to add disclaimers to their posts

Many of those polled also said they believe social media platforms have a duty to monitor and clamp down on misleading financial advice.

Eileen Tipoe, author of the report, acknowledged that some financial influencers create “great content”.

However, she said there is a “clear gap between how influential financial guidance on social media has become, and the level of oversight that currently applies to it”.

“While social media can improve access to information, the lack of consistent standards by the platform providers and disclosures means many users are exposed to guidance that would not meet basic quality expectations in other settings,” Ms Tipoe added.

Financial watchdog wants social media platforms to do more

This comes shortly after the Financial Conduct Authority (FCA) called on social media platforms to do more to stop harmful content before it reaches people.

“This collective push with international partners is vital in helping to protect millions of consumers from harm,” said Steve Smart of the FCA.

“We will only make real progress in the fight against financial crime if every part of the system plays its role - including social media firms.”

How to protect yourself from bad financial advice

If you want to be sure that you’re getting financial advice from a trusted source, there are several steps you can take.

Check for FCA accreditation

Find out if the person or company offering financial advice or promoting certain products is FCA-regulated on the watchdog’s website.

Do your own research

If an influencer is promoting a financial product, look for reviews and comments on platforms other than social media.

Be cautious about high-risk investments

Don’t rush into high-risk investments that promise quick returns, even if your favourite influencer is plugging them.

Some finfluencers might have thousands of followers, but that doesn’t mean they’re qualified to give financial advice, or even acting lawfully.

So don’t take what they say at face value.

Check out our guide on getting financial advice to find out more about finding a reputable, qualified adviser.