With finance advice and entrepreneur business hacks becoming the new trend on social media for 2024, A new study from MoneySuperMarket, with Financial Planners, Penguin Wealth has found nearly three quarters (74%) of videos from ‘so-called ‘finfluencers’ contain poor, misleading or potentially dangerous advice.
The study comes as the Financial Conduct Authority (FCA), warned influencers earlier this year to stay on the right side of the law with their content
The money saving service analysed 350 short-form social media videos linked to finance-related hashtags, across popular social media platforms, finding an alarming number of videos containing incorrect, unrealistic and in some cases questionable life and relationship advice under the guise of creating the ‘wealth mindset’, with videos targeted at children as young as 11.
Key findings of the study included:
- 74% of videos contained financial advice that was incorrect, misleading, high risk or potentially harmful
- 8 out of 10 (81%) videos that were promoted using money related hashtags contained unregulated financial advice,
- One in 10 (9%) of ‘finfluencer’ videos were targeted at under 18s
- 77% of ‘finfluencer’ videos promote a financial product or service
- 76% contained unrealistic scenarios, such as outlandish investment gains*
- Nearly a third (32%) encouraged viewers to put money in high risk schemes without explaining potential downsides or losses
- Two fifths (41%) of videos promoted or normalised unhealthy attitudes towards money (such as extreme frugality, for instance ‘never buy things for yourself’)*
- 28% of videos gave potentially damaging personal and relationship advice (such as cutting out family members and friends)
- Tips and advice contained in 38% of videos were deemed ‘total nonsense’
- 86% of videos on the topic of investing, forex or cryptocurrency contained bad advice, with 62% telling views to invest in specific stocks or products, and 73% pushing particularly high-risk investments
of the 74% of videos flagged as containing poor, misleading or dangerous advice
The MoneySuperMarket Risky Business Finfluencer Study
Over a period of three months, MoneySuperMarket’s panel of experts reviewed 350 short form videos across a range of money-based hashtags.
To determine whether a video was ‘good’ or ‘bad’. The panel judged each video against the following criteria:
- Is the advice regulated?
- Is the person giving the advice qualified?
- Is the advice correct for most people?
- Is the advice realistic?
- Does the advice highlight any appropriate risks?
- What is the risk level of the advice?
- Does the person giving advice also promote an affiliated product?
- Could the advice given have a negative impact on finances or mental health?
- Is the advice total nonsense?
Against this criteria, just 26% of videos in the study were assessed containing helpful, correct and responsible advice.
Social media platforms littered with ‘dangerous’ and unregulated financial advice
MoneySuperMarket’s panel found that eight out 10 (81%) in the study contained unregulated financial advice, with around three quarters (77%) of influencers also using their “tips and tricks” to promote a product or service in their video, description, or bio.
Our panel deemed that a staggering seven out of 10 (74%) of the videos reviewed contained poor, misleading or potentially dangerous advice, often from influencers with no declared financial qualifications or expertise.
In addition to poor, unqualified and unregulated financial advice, the panel noted a trend of promoting an unhealthy, potentially harmful culture towards money (41%), work and relationships (28%), which could potentially be damaging for viewer’s mental health.
Examples of advice the panel considered dangerous included encouraging viewers to isolate themselves from friends and family, only befriend wealthy people, avoid dating and relationships to prioritise earning, and the frequent use of derogatory terms such as “stupid”, “lazy” and “losers” to describe the viewer or others for not being money oriented enough to be rich, despite the schemes or tips presented often being unrealistic.
The most misleading categories
Based on the content, each video in the study was sorted into one of 4 categories:
- Investment advice (including cryptocurrency and forex): 86% of videos ‘bad’
- Budgeting and Saving advice: 73% of videos ‘bad’
- General money advice: 68% of videos ‘bad’
- Business advice (including ‘side hustle’ tips): 68% of videos ‘bad’
Of the videos studied, investment videos (including cryptocurrency and forex) contained the highest percentage of misleading or poor advice, with 86% of videos being flagged.
Most investment videos (76%) avoided talking about risks altogether. Instead, discussing gains as if they were guaranteed. Almost the same number (73%) pushing high-risk investments.
Instead of warning about potential losses, most videos (77%) made misleading claims about how easy it is to profit from trading or crypto, often boasting that little to no work or knowledge is required.
What our panel said:
Panel member, Kara Gammell, personal finance expert at MoneySuperMarket said: “Of the videos I reviewed, the vast majority were either misleading, unrealistic, or in some cases potentially dangerous.
As a parent, it’s staggering the amount of content our children consume daily, and now money talk and side hustle culture seems to have become the latest trend on the playground. But while kids engaging with bite sized information about things like savings and budgeting might sound like a good thing, the reality is very few of them contain accurate, realistic or genuinely helpful information.
Most worrying for parents is the number of videos which present as money tips only to veer off into questionable personal advice, like cutting out friends or family, or only valuing people who make significant amounts of money. This seemed particularly prevalent in videos aimed at boys and young men, which were often steeping in aggressive masculinity.
Often, we found videos preyed on the self-esteem of those watching them as well, with the influencer seemingly living a life of luxury suggesting it was incredibly easy for people to do the same, despite offering no real advice, usually with the end game of getting more engagement or selling some type of mentoring course.
To those drawn in by so-called finfluencer videos, the financial adage still applies, if it seems too good to be true, it probably is. Question who the person is and what they gain by creating their content, being especially wary if they’re selling a product or service alongside it.”
Panel member Craig Palfrey, Certified Financial Planner, Chartered Wealth Manager and Managing Director of Penguin Wealth, said: “When it comes to making the right financial decisions, there’s no ‘one size fits all’. Every person is different, and no two circumstances are the same.
That means, even if you take some of these creators and their advice at face value, there’s no guarantee that just because something worked for them, it will work for anyone watching their content.
However, that’s a generous interpretation, given the content of the videos we reviewed. In most cases we found advice to be overly simplified, unrealistic, and in some cases, total nonsense.
While not all videos we reviewed offered bad advice, my view would be to exercise caution when considering following money tips from influencers, especially if they are not part of an established, reputable organisation.”
