More than half of people who have followed financial advice they found on social media have ended up losing money, new research from TSB has revealed.
According to Financial Reporter, the study, which surveyed nearly 2,000 social media users, found that 31% had acted on financial advice they discovered on social platforms, with 55% of those losing money as a result. The findings come as the FCA continues its scrutiny of ‘finfluencers’ and the spread of unregulated investment tips online.
TSB’s research highlighted that 42% of 16-24-year-olds have accessed financial advice via social media in the past year, dropping to 37% for those aged 25-34 and just 11% among the over-55s. Trust in social media financial content was also found to be high, with over half (53%) of those who had seen advice on social platforms saying they trusted it. This figure rose to 70% among 25-34-year-olds, while 62% of 16-24s expressed trust, compared to only 27% of over-55s.
Alarmingly, 83% of people reported encountering financial advice content on social media that they had not been actively searching for, with over half (51%) stating they had either acted on this advice or were planning to do so. Younger age groups were significantly more likely to act, with 73% of 25-34s and 49% of 16-24s taking or considering action, while only 13% of over-55s did the same.
The report also found that 90% of respondents had seen investment opportunities on social media, and 43% would consider investing as a result, with younger audiences again the most likely to engage.
However, a significant knowledge gap remains, with 42% of people admitting they did not know how to verify the credibility of online financial content or offers.
TSB’s internal data shows that over two-thirds (67%) of push payment investment fraud cases originate from social media, which now accounts for 71% of all investment fraud losses, averaging £3,706 per case. Facebook and WhatsApp were responsible for the largest financial losses, accounting for 36% and 35% of total losses, respectively, while platforms like TikTok, Telegram and Instagram were also notable sources of fraudulent activity.
Beyond financial loss, the study noted the psychological impact of social media on financial well-being, with 43% of respondents stating they felt worse about their finances after seeing posts about wealth online. This sentiment was strongest among 16-24-year-olds, where 67% reported feeling worse, followed by 61% of 25-34s, with just 22% of over-55s experiencing similar feelings.
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