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A report published by the London Foundation for Banking & Finance identifies a worrying trend where young people are turning more and more to social media influencers to find out about finance. The report is titled "Young Persons Money Index".

The report

The report found that the number of young people who used self-learned sources, including social media and influencers, increased from 19% in 2022 to 23% in 2023. The majority identified social media or influencers as the sources used by the majority.

The worry

The reason that it's a worrying trend should be clear. Social media has a poor track record of providing accurate and up-to-date information. Worse is the reliance on an influencer with millions of followers who have no financial expertise pushing advice or products that favour someone or a company paying for that influencer.

So-called Finfluencers have come under much criticism. In recent months, trading app firm M1 Finance was fined 850k for effectively hiring 1,700 influencers to spread misleading posts about stock market investment.

Also, nine influencers have recently been charged for promoting an unauthorised foreign exchange firm. Popular influencers, including Lauryn Goodger, Yazmin Oukhellou, Biggs Chris, Scott Timlin, and others, promoted the firm via a total of 4.5m followers on Instagram. UK regulators did not authorise the firm they promoted to provide advice on buying and selling exchange contracts.

These influencers carried out zero due diligence and none of them even understood what they were promoting, it was nothing more than money earner with no concern for their followers.

It demonstrates how important it is to seek professional advice from authorised firms and never to rely on what is seen on social media. Nobody using those services promoted by influencers has any protection when it all goes wrong.

Education

Financial education from a young age is more important than ever. A positive note in the report is that 69% of young people have studied personal finance at school. This is a reduction from 73% reported in 2021 but an overall increase of 29% since 2015.

If there is anything related to finance, we should teach our children never to trust online sources to make important decisions and to always seek professional advice. I even say this about this blog. Whilst I can provide information in good faith that you can use as a starting point, never rely on it being correct when you find it. When it comes to taking action on something, always, always get the right advice from the right person or firm authorised by the industry regulator for your own protection.