Some 51 per cent of UK adults who use social media for investment guidance do not carry out checks to verify the reliability of ‘finfluencers’ and their content.
Research by Barclays found 23 per cent of Brits were turning to social media, community messaging apps and online forums for investment guidance.
It also revealed 19 per cent turn to social media because it provided them with “free access to financial experts”, with 26 per cent thinking that it was “quick and easy to use”, while 19 per cent thought the format of content was “easy to digest”.
Young people were even more likely to use social media in this way, with 37 per cent going to these channels for investment support.
TikTok was the most popular among those aged 18 to 24 with 46 per cent using the app for investment support.
For millennials and Gen X, Facebook was the most used social media site for investment information.
According to the research, very low numbers of Boomers who are aged 55 and over used social media to seek investment guidance.
Barclays believed this may be because they were either less active on these channels or were willing to pay for a financial adviser.
Only 49 per cent of those who used social media for financial guidance always checked the information they received were from a reliable source such as an accredited professional or experienced investor, leaving them at risk to unsuitable investment decisions or even scams.
Clare Francis, director of savings and investments at Barclays Smart Investor, said: “Our research shows that a quarter of people don’t know how or where to start investing, with growing numbers turning to social media for this support.
“These platforms clearly play a positive role in making investment information more relatable, but they also come with risks. It can be difficult to work out which accounts are trustworthy and run by experienced financial professionals, so it’s worrying to see that half don’t carry out regular checks on finfluencers.”
The research also revealed 39 per cent of those aged 18-24 felt unsafe on social media due to the prevalence of scams, with 73 per cent wanting tech firms to do more to stop scammers operating on their platforms
When asked what would improve confidence in the investment content shared by social media influencers, better understanding of risk was key.
Of those who used social media for investment content, 50 per cent said they wanted more information on the potential risks involved, while 45 per cent wanted more transparency on any investment mistakes ‘finfluencers’ have made in the past and how they navigated them.
Significantly, 73 per cent wanted social media platforms to introduce a verification system for influencers promoting financial content, to help them identify genuine accounts and their financial credentials.
Sasha Wiggins, chief executive of Barclays Private Bank and Wealth Management, added: “The increase in finfluencers demonstrates that consumers value examples of how people in similar situations are investing their money.
“We believe that the investment industry needs to work with the Government and regulators to enable firms, such as banks, to provide better, more personalised support to would-be investors. This will create an environment that protects and empowers investors by giving them information from trusted sources, helping them to invest with confidence.”
