Wednesday, August 31, 2022
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1.3m Texans admit to taking financial advice from social media influencers, survey reveals.
- And over 20 million Americans admit to doing so.
- Young viewers are particularly vulnerable to consuming potentially harmful information about investing.
- Infographic showing nationwide results.
#FinTokFactCheck: Not only are social media platforms solely spaces for entertainment – many have now metamorphized into platforms where people come to learn a host of different skills. These include investing – aptly dubbed ‘FinTok’, the financial space on TikTok is growing globally – and quickly, with content tagged #FinTok having gained more than 1.6 billion views overall, and #PersonalFinance sitting at over 6.4 billion views at present. Many people are tiptoeing into the world of finance for the very first time after being inspired by short videos they’ve seen on social media. This leaves many viewers (particularly young people with no prior knowledge of money matters) vulnerable to consuming potentially harmful information about making important financial decisions.
A survey of 3,000 social media users by CouponBirds revealed the extent to which some social media personalities influence people’s financial decisions – 1,388,319 Texans admit to having taken and acted upon financial advice from social media influencers – be it topics such as taxes, college loans, credit scores and cards, budgeting, debt, investing for retirement, and even options trading.
Although there are campaigns, such as #FactCheckYourFeed that have been introduced to minimize the chances of sharing unverified, non-factual knowledge with millions of viewers, it’s still very possible for unsubstantiated information to emerge on these platforms. This leaves many viewers (particularly young people with no prior knowledge of money matters) vulnerable to consuming potentially harmful information about making important financial decisions. Moreover, there is always the risk of influencers engaging in market manipulation to benefit their own economic investments and money motives.
Money matters (and money motives) on social media
Although campaigns like TikTok’s #FactCheckYourFeed aim to prevent the spread of misinformation and reduce potential harm to viewers, there are some creators still sharing this kind of content across several platforms, aimed at those lacking in sufficient financial knowledge to be able to make informed decisions. TikTok, for example, has banned branded content that promotes financial products or services, including things like cryptocurrency. “It’s vitally important to conduct your own research when it comes to seeking out information to help advise financial decisions – and don’t make big decisions based on a social media trend, or solely off advice from an influencer” says Tricia Smith of CouponBirds.
Some financial myths often perpetuated on social media include advising people to purchase hotel points when booking a trip (oftentimes, this simply isn’t worth the cost as they can cost as much as $0.01 per point); options trading (notoriously risky due to bearing no guarantees), and short selling (includes the high risk of stock loans increasing and being recalled).
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