Millions of young people in the UK are taking advice from financial influencers – so-called ‘finfluencers’ – via social media on how to manage their money.
New research from financial services communications consultancy MRM in partnership with Mouthy Money reveals that more than six in 10 (62%) 18-29-year-olds follow finfluencers, with almost three quarters (74%) trusting the advice they provide.
As a result, as many as nine in 10 (90%) of those young followers have been encouraged to change their financial behaviour.
For example, 40% have subsequently reduced their spending, 38% have invested in a variety of assets, 32% have used ‘buy now, pay later’ schemes, 29% have started budgeting, and 25% have paid off debts.
The rise of the online finfluencers has coincided with young people’s growing interest in financial markets during the pandemic.
Nearly three in five (57%) 18-29-year-olds currently invest and more than half of those (59%) started after March 2020 when lockdown restrictions began.
A relatively small proportion (11%) invest in cryptoassets compared with shares (24%) or funds (24%). But the majority (52%) feel positively about crypto, considering it a good investment opportunity, a strong long-term store of value, or a positive force in the democratisation of finance.
Most respondents first learnt about crypto via friends or family (33%), through social media or an online influencer (30%), or in the personal finance media (22%).
However, putting money into bitcoin, ether and other cryptoassets is less of a priority for young people than investing ethically.
When asked whether they would be more likely to invest in a cryptoasset or an ESG fund, nearly two-thirds (63%) chose the latter over the former (37%).
Cem Balci, Consultant at MRM, commented: “It is excellent to see so many young people engaging with their finances and taking positive, proactive steps to secure their financial future.
“The past two years have fuelled unprecedented interest in financial markets from a new breed of investors and have potentially revolutionised an entire generation’s relationship with money. Where once there was apathy, there is now intense and increasing engagement.
“The pressure on incomes and the rising cost of living also mean that younger generations are looking for fast, accessible and digestible guidance on how to most effectively manage their money.
“Certainly, there is still a place for trusted experts and traditional financial advisers, but it is also clear that viral media may now be the best way of reaching and interacting with younger adults.
“When it comes to investing, young people are of course focused on what will generate the best returns, but there are also signs of an ethical, social and environmental consciousness entering their financial considerations. How to engage that consciousness early on and help to turn ethics into real financial actions is a question that the industry will want to answer sooner rather than later.”