Some 71 per cent of the financial advice young people consume via social media is misleading.
A study by Social Capital Markets analysed more than 2,470 stock-related videos across platforms like TikTok, Youtube and Instagram.
It found 83 per cent of videos lacked disclaimers leaving viewers with a one-sided picture of financial decisions.
While 70 per cent of videos actively promoted specific stock picks without offering adequate context or addressing risks.
Content also implied that following their investment advice would guarantee wealth or returns, a highly misleading notion given the volatile nature of stock markets (57 per cent).
Some 45 per cent of videos encouraged viewers to invest a specific proportion of income.
Out of all the content analysed only 13 per cent of the creators had the relevant qualifications or credentials to speak about anything in financial matters, according to the study.
Among the social media platforms analysed, TikTok emerged as being the most problematic, being described as the ‘wild west of financial advice’.
Crypto influencers
Across TikTok (51 per cent), Instagram (44 per cent) and Youtube (40 per cent), the number one thing crypto influencers were focusing on was memecoins.
Cryptocurrencies focused on artificial intelligence technologies were the second most talked about subject amongst crypto creators.
According to the data, NFTs were losing popularity and saw lower engagement across the platforms.
Social Capital Markets said :“The lack of clear regulations around financial advice on platforms like TikTok and Instagram means that influencers with little or no financial background can offer recommendations with little accountability.
“As a result, many young investors rely on tips that may not suit their financial situation.
“Given the volatility and the rapidly evolving nature of the crypto market, these trends point to an even more hazardous environment for young investors, especially those who turn to social media for quick and easy advice.”
alina.khan@ft.com
