A survey of 2,000 UK adults* found that 33% regret taking advice from social media financial influencers - dubbed as ‘finfluencers’ - who they now believe overstated their own credentials.
The research was carried out by investment brokerage XTB, and was revealed at its annual XTB Masterclass finance education event.
The study highlighted the nation’s growing economic fears, with more than half (54%) of respondents revealing they aren’t financially prepared if recession hits, and nearly half (47%) pushing back their retirement plans, due to rising inflation.
To combat these concerns, a third (33%) of money-savvy Britons have made investments in stocks and cryptocurrency to protect their family’s future. However, the study revealed a finance education gap, with nearly six in ten (59%) feeling undereducated about finance, and more than four in ten (42%) wanting to invest money, but lacking the knowledge to do so.
To address this education gap, the UK has seen a rise in online content creators sharing their finance advice on social media, with the study revealing that there are now 71,159** UK finfluencer accounts on Instagram, TikTok, and YouTube alone.
Of these, 37,847 provide investment guidance, and 7,246 offer cryptocurrency advice. Only 5.5% of UK finfluencer accounts analysed were verified, and 61.4% demonstrated signs of suspicious activity***.
Finfluencers were most popular with millennials and younger, with more than half (53%) of under 35-year-olds taking their finance advice from social media, compared to just 24% of those over the age of 35.
However, nearly half (46%) of Britons found the volume of online finance advice overwhelming, and didn’t know how to identify who was legitimate, while nearly a third (29%) spent less time verifying the credentials of online finance experts, compared to those they met in person.
XTB Director Joshua Raymond said: “This research shows the level to which people feel they are undereducated when it comes to their personal finances.
“It’s encouraging to see so many addressing this by seeking out finance advice on social media, and there are many credible online experts helping people make better decisions. However, there are also many that either mislead their followers over their successes, or are not who they claim to be. This represents a real risk.
“To best protect yourself it’s critical to maintain the same level of scrutiny you would over an influencer’s credentials as you would with a financial advisor you met in person.”
The XTB Masterclass featured a debate with finance influencers about the risks of taking advice from social media. The host, Caroline Rundell - a BBC journalist turned TikTok trader - revealed how her content is being illegally cloned daily, in order to dupe unsuspecting followers.
Rundell said: “We are seeing a surge in financial ‘content cloning’, where a criminal creates a fake social media account to pose as a trusted finance expert, using that person’s video content. Their aim is to build up a following, before asking these followers for money to invest, in return for big financial returns. The criminal then disappears with the money, and moves onto a new fake account.
“Two years ago this was happening to my content on a monthly basis. However, the past six months have seen this skyrocket, and now I have to ask social media platforms to remove cloned content of mine many times every day.
“The XTB Masterclass debate revealed all the panelists found this to be a significant issue, and there were strong suggestions on how to best verify who you are listening to online - starting with remembering credible experts should never directly message you with an ask for money.”
Visit XTB UK on YouTube to check out the full list of online safety advice, in the Dos and Don’ts of Social Investing debate, alongside all other video talks from the XTB Masterclass 2022.