There are many routes individuals use to access financial advice, with some less credible than others. The internet and social media platforms are both quick ways to access advice. However, the downside is anyone can publish financial advice, leading to the spread of misinformation.
After growing up in a digital age society, Generation Z seems to have an innate reliance on social media, which poses the question – does it leave them vulnerable to financial exploitation?
The Study
A study showed that 27% of Gen Z get financial advice from social media, higher than any other generation. 31% of 18-40 year olds describe themselves as ‘fully confident and informed’ when it comes to investing, in contrast to just 16% of 57-75 year olds. One in four people who lost money to fraud in 2021 reported that this started on social media, and the number of under-20s falling victim to online identity theft has increased by 156% from 2017 to 2020.
Luke Eales, CEO of Moneyzine.com, commented: “It’s clear that younger generations are changing how they access financial information compared to older generations. However, what we may need to consider is that social media provides an instant gateway to thousands of sources – both reputable and questionable. Rather than questioning the credibility of social media as a whole, perhaps more pertinent is whose content Gen Z is consuming on these platforms. What remains to be seen is how the increased reliance on social media and instant-access platforms for financial advice will benefit – or hinder – younger generations during this current financial crisis.”
Amir Noor, CFP, United Financial Planning Group, LLC, says, “I think social media is good for financial literacy but bad for financial advice.”
Specifically speaking to Gen Z, Noor says, “Gen Z has the opportunity to know about credit scores, good debt vs. bad debt, growing assets, investing, etc. However, everyone’s financial situation is different and unique, and they’d be better suited getting personalized advice from a financial advisor.”
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A Dime Saved
Hi! I am a millennial mom with a passion for personal finance. I have always been “into” personal finance but got inspired to start my blog after a period of extended unemployment. That experience really changed the way I viewed my relationship with money and the importance of accessible personal finance education.