From knowing where to start investing your money to budgeting tips and saving to buy a home, the world of finance and the complex terms used can feel overwhelming. This prompted more people — and particularly younger generations — to turn to social media for information.
While there are increasing efforts to improve financial education, there is still a low level of literacy around the subject. More than 23 million, or two-fifths, of UK adults have poor financial literacy, according to research from Abrdn (ABDN.L), published in July.
For a young person just starting to manage their own finances, finding out how to do in the best way can feel daunting if they haven’t had enough education on the subject. This can raise questions around how much to save into their pension or the best individual savings account (ISA) to choose, to name a few.
A recently published survey from BlackRock (BLK) and YouGov (YOU.L) found that there had been a rise in the number of people investing in the UK since 2022. This had been partly driven by a 30% rise in the number of those investing aged 25-34.
This builds on separate research showing growing interest in investing among young people. Research from the CFA Institute and the Financial Industry Regulatory Authority Investor Education Foundation (FINRA Foundation), published last year, found 81% of Gen Z investors surveyed in the UK said they began investing before they turned 21.
As this interest grows, many are turning to social media and financial influencers, or “finfluencers”, to help them understand this space. A quarter of 18-24 year olds in the UK used social media when searching for financial guidance, according to research from Deloitte, released in October 2023,.
In fact, the “FinTok” hashtag on TikTok had 4.7 billion views as of January 2024, according to a report from the Pensions Policy Institute. This encompasses a broad range of topics, including investment, credit and property.
Rich McDonald, who has more than two decades of experience in financial markets and has previously worked for Credit Suisse, decided to move into this space after he started running small classes during the pandemic.
“[I] got stuck in New Zealand over Covid and of course, that was 2020 when the space just exploded. It was so many people’s new interest in this crazy world that we have in investing,” he said on a panel at the 2024 Finfluencer Awards event on Tuesday, hosted by Yahoo Finance UK.
“So I started to small run classes of around 15 people. Really enjoyed it, really enjoyed the teaching side and decided, ‘Why stop at the personal classes? Let’s go for social media,'” he said.
