Research says Aussies risk wallet woes by seeking financial advice on social media!
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In an age where information is at our fingertips and social media reigns supreme, it's no surprise that Australians are increasingly turning to online platforms for guidance on a range of topics.
These include relationships, life, and sometimes, even financial advice.
However, this new trend has raised red flags among financial experts, who are concerned about the reliability and quality of the advice being dispensed.
According to recent research from Compare Club, nearly one in three Australians is seeking financial advice from social media influencers, or ‘finfluencers’, on platforms such as YouTube, Facebook, and TikTok.
This statistic is even more pronounced among younger demographics, with half of those aged 18-24 relying on these unconventional sources for financial insights.
Meanwhile, they found that 10 per cent of people over 55 turn to these platforms.
While the digital age has democratised access to information, the Financial Services Council's Chief Executive, Blake Briggs, warned that the rise of finfluencers could have a detrimental impact on how people, especially the younger generation, manage their money.
‘Too many Australians are getting financial advice from unreliable sources like social media,’ Briggs said.
‘It's impossible to tell who is providing good advice on social media and who isn't. For the average Australian, it's very difficult for them to discern what is good advice and what is not.’
According to Mr Briggs, the allure of social media for financial advice is partly due to the high cost of professional financial assistance.
Hiring a financial adviser or accountant can set someone back between $3,500 to $7,000, a price range that is often out of reach for many Australians.
This has led to a concerning rate of individuals turning to social media as a more accessible, albeit less reliable, source of financial guidance.
‘There is a big concern with the rise in social media as a source of information is unstoppable,’ Mr Briggs warned.
‘The way to tackle that is to make sure the cost of advice from reliable sources comes down through government reform.’
‘The cost of providing financial advice has been weighed down by regulations putting it out of reach to most Australians,’ he added.
The implications of this trend are significant. The research indicated that people who rely on social media for financial advice are twice as likely to pay their bills late and three times more likely to use a credit card.
Furthermore, about 79 per cent are more likely to be living beyond their means.
‘This research highlights that there is a growing demand for cost-effective, accessible and easy-to-understand financial insights at a time where cost of living pressures are high,’ Compare Club’s Head of Research Kate Brown explained.
‘While many content creators do a great job teaching skills like budgeting or investing, it can be very difficult to assess the legitimacy of advice.’
‘We've found an alarming link between those who use social media for financial advice and increased difficulties in their financial affairs,’ she continued.
As more Australians turn to social media for financial advice, with ‘finfluencers’ gaining popularity, it's important to distinguish between sound guidance and risky trends.
Experts are now weighing in on various money-saving strategies, helping to clarify what’s truly effective and what might be more ‘coin-troversial’ than beneficial.
Have you stumbled upon a piece of financial advice from social media that you have followed until now? How do you separate which ones to try and which ones to avoid? Share your experiences and insights in the comments below!
These include relationships, life, and sometimes, even financial advice.
However, this new trend has raised red flags among financial experts, who are concerned about the reliability and quality of the advice being dispensed.
According to recent research from Compare Club, nearly one in three Australians is seeking financial advice from social media influencers, or ‘finfluencers’, on platforms such as YouTube, Facebook, and TikTok.
This statistic is even more pronounced among younger demographics, with half of those aged 18-24 relying on these unconventional sources for financial insights.
Meanwhile, they found that 10 per cent of people over 55 turn to these platforms.
One in three Australians, especially young adults aged 18-24, now seek financial advice on social media. Credit: Shutterstock
While the digital age has democratised access to information, the Financial Services Council's Chief Executive, Blake Briggs, warned that the rise of finfluencers could have a detrimental impact on how people, especially the younger generation, manage their money.
‘Too many Australians are getting financial advice from unreliable sources like social media,’ Briggs said.
‘It's impossible to tell who is providing good advice on social media and who isn't. For the average Australian, it's very difficult for them to discern what is good advice and what is not.’
According to Mr Briggs, the allure of social media for financial advice is partly due to the high cost of professional financial assistance.
Hiring a financial adviser or accountant can set someone back between $3,500 to $7,000, a price range that is often out of reach for many Australians.
This has led to a concerning rate of individuals turning to social media as a more accessible, albeit less reliable, source of financial guidance.
‘There is a big concern with the rise in social media as a source of information is unstoppable,’ Mr Briggs warned.
‘The way to tackle that is to make sure the cost of advice from reliable sources comes down through government reform.’
‘The cost of providing financial advice has been weighed down by regulations putting it out of reach to most Australians,’ he added.
The implications of this trend are significant. The research indicated that people who rely on social media for financial advice are twice as likely to pay their bills late and three times more likely to use a credit card.
Furthermore, about 79 per cent are more likely to be living beyond their means.
‘This research highlights that there is a growing demand for cost-effective, accessible and easy-to-understand financial insights at a time where cost of living pressures are high,’ Compare Club’s Head of Research Kate Brown explained.
‘While many content creators do a great job teaching skills like budgeting or investing, it can be very difficult to assess the legitimacy of advice.’
‘We've found an alarming link between those who use social media for financial advice and increased difficulties in their financial affairs,’ she continued.
As more Australians turn to social media for financial advice, with ‘finfluencers’ gaining popularity, it's important to distinguish between sound guidance and risky trends.
Experts are now weighing in on various money-saving strategies, helping to clarify what’s truly effective and what might be more ‘coin-troversial’ than beneficial.
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