New research from Skipton Building Society reveals 18.6 million UK adults say they trust the financial advice shared on social media platforms.
With scrutiny mounting on social media platforms, new research by Skipton Building Society reveals that 18.6 million UK consumers say that they trust the financial advice that they see across TikTok, Instagram and Facebook.
However, when asked who they would trust the most to provide reliable money management advice, financial advisors (87%), successful businesspeople (86%) and spouses (77%) came out on top.
This research comes after TikTok announced that it would ban financial services promoted on the platform in its latest move to limit bad advice and misleading information online.
Despite two in five (41%) respondents stating that they would not trust social media stars when it comes to financial management, Skipton’s research shows that the majority of 18–34-year-olds (64%) trust advice shared online and believe it is all reliable. This is in stark contrast to those aged 35+, with 46% adamant they would not trust a social influencer for financial advice.
This is due to consumers preferring to have a personal connection (50%) with those they seek advice from, knowing that the advisor understands their personal circumstances (47%), or knowing someone else who has taken good financial advice (46%). When it comes to financial advisors, respondents said their strong financial knowledge (55%) was key to winning their trust. Whereas those who trusted loved ones said this was because they felt they had their best interests at heart (55%).
Helen McGinty, Head of Financial Advice Delivery at Skipton Building Society, said: “When it comes to getting our finances in order, social media can feel like a good place to go for advice, because it’s anonymous and helps avoid conversations which can sometimes feel uncomfortable. However, it’s vital to make sure that the advice you’re following is reliable and credible, especially when it comes to investing your own money. There is a place for financial education online, and there are a lot of very well-informed voices and influencers across these platforms that do it well, but sometimes when it comes to investment advice, content isn’t always a trustworthy as it appears, and it isn’t financially regulated. So if you’re looking to invest or make the most of your pension, it’s worth seeking out professional, regulated advice first
“At Skipton Building Society, we believe that talking to someone with a strong understanding of the best ways to prepare for your future is the first step to making the most of your money. Skipton’s specialist financial advisors can do the hard work to help with retirement planning, pensions and investment advice, to get your money in a good place so you don’t have to.
“And it was pleasing to see in the research that financial advisors (87%) and successful businesspeople (86%) are considered almost equally trustworthy when it comes to providing reliable financial advice.”
Testing trust with behavioural science
Building on the consumer research, Skipton Building Society conducted several behavioural science tests to identify the traits behind trustworthiness. Working with Opinium, Skipton commissioned an experiment which involved creating a number of fictional social media personalities, each of whom were offering the same financial advice. This was presented to a panel who were then asked how likely they would be to follow the advice of each personality and why.
Overall, the tests revealed that people want to be able to relate to the person sharing financial advice, and those who are in a similar position to them are the most likely to be trusted.
Three fifths (60%) of those surveyed said they were more likely to trust someone who uses simple and uncomplicated financial jargon. This contrasts with just one in ten (15%) of people who said that using complicated and difficult language would mean they trusted someone more.
Iona Bain, broadcaster and founder of the Young Money blog, commented: “So-called “finfluencers” have turned the traditional world of finance upside down, using social media to establish popular and lucrative platforms for financial advice. despite usually having little or no qualifications for the job. Celebrity influencers have also joined the party, marketing crypto currencies alongside teeth whitening.
“But I’m increasingly worried that young people do not have the know-how and experience to determine whether the advice they receive online is trustworthy, reliable and relevant. We urgently need proper financial education, better online regulation and more authoritative sources of information to cut through this internet jungle and ensure a whole generation doesn’t end up poorer and disillusioned about money.”
