As money concerns grow amongst the British public, a third of UK adults believe they have been misled by online finance experts, research has revealed. A survey of 2,000 UK adults found that 33 per cent 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 per cent) of respondents revealing they aren’t financially prepared if recession hits, and just under half (47 per cent) pushing back their retirement plans due to rising inflation.
To combat these concerns, a third (33 per cent) of money-savvy Brits 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 10 (59 per cent) feeling undereducated when it comes to finance, and more than four in 10 (42 per cent) 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 per cent of UK finfluencer accounts analysed were verified, and 61.4 per cent demonstrated signs of suspicious activity. Finfluencers were most popular with millennials and younger, with more than half (53 per cent) of under-35s taking their finance advice from social media, compared to just 24 per cent of those over the age of 35.
However, nearly half (46 per cent) of Brits found the volume of online finance advice overwhelming, and didn’t know how to identify who was legitimate. Nearly a third (29 per cent) 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 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 that all the panellists 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 that 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.
