Gen Z Is Turning to TikTok for Financial Advice, and It’s Not Going Well

Social media is good for entertainment, but is it good for advice? A Harris poll says that Gen Z is increasingly turning to social media platforms to be informed. Is that a good thing? Or something to be worried about?


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“If you think TikTok is just about viral dances, you’d be mistaken. Young people are turning to it for deeper purposes, like gathering information, building community, and cultivating equity,” said Abbey Lunney, co-founder of The Harris Poll Thought Leadership Practice. “We see a giant shift happening in social media away from surface-level likes, hyper-edited photos towards spaces for authenticity and discovery.”

Gen Z Is Leaning Into the Algorithm

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According to the poll, Gen Z doesn’t turn to social media to see updates from their friends; instead, they turn to social media to be informed, entertained and get direct messages.

For example, Gen Z says their feed is ‘filled mostly with personalized content that the platform thinks I’ll like’ (62%), and a majority agree that ‘algorithms have increased the content they like to consume and be entertained by’ (65%). This is in contrast to older people, like Boomers and Gen X, whose majority of their feeds consist of ‘updates from friends/people I follow’ (66% and 57%, respectively).

TikTok Is the New Search

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For Gen Z, TikTok is where they go for search and education. TikTok is the first platform Gen Z uses to search for culturally relevant content; TikTok (34%) beating YouTube (24%), Google (19%), and Instagram (17%).

This is in contrast to older generations, including Millennials, where Google continues to be the first platform users turn towards (Boomers 57%, Gen X 47%, Millennials 40%).

Be Wary

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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.”

The Problem With Social Media

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David E. Barfield, CFP, Datapoint Financial Planning, LLC,  says, “The problem with getting advice from social media is that there are so many voices saying contradictory things (and trying to sell something) that it’s nearly impossible for someone trying to learn and implement strategies from social media influencers to know what to believe and to figure out what’s right in their specific situation.  There are also many great voices on social media giving solid advice, but for every one of those, I see a multitude of people giving truly awful advice that could derail your plans before you even get started.”

Barriers to Financial Advice

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Financial Advisors have traditionally been thought to be for the wealthy, but Barfield says that times have changed.

“The problem has been accessibility to an advisor for someone who doesn’t “have enough assets to be managed.”  The focus of the industry has traditionally been “managing assets” as the primary value proposition,” he says.

Fee Models

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Barfield continues, “Fortunately, the fee models and the focus areas are changing a bit.  There are now many great advisors serving younger families (and DIY investors) with flat monthly and one-time fee structures and business models focused on the financial planning more so than the investments, which have been largely commoditized.

Where should they look for financial advice? Barfield says, “I would encourage anyone looking for financial advice on social media to take a look at sites like Wealthtender, Advice-Only Network, and XY Planning Network.  You might be surprised to find many affordable advisors serving your age group or stage in life with no expectation of managing your money directly or selling you anything.  In other words, unbiased financial advice from a trained professional.”

Social Media Affects Financial Behavior

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Ryan Graves, CFA, Bemiston Asset Management, says Gen-Z needs to be more aware of how social media affects their financial behavior.

He says, “Many Gen-Z investors piled into crypto and tech stocks, following a trend and thinking they were diversified. However, tech stocks and crypto are pretty speculative and highly correlated, meaning investors are less diversified than they think, even though the assets seem different. Talking with a professional about your portfolio and circumstances can help determine if you are properly diversified and taking appropriate risks.”

Feedback Loops

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He explains why he thinks this happens, “Social media also creates feedback loops for investors, leading to concentrated portfolios and potentially inappropriate risk-taking. Social media tends to perpetuate the latest and greatest fads, and investors can be susceptible to jumping in without fully understanding the risks. When you see everybody else doing it, you may react to your FOMO and jump in without knowing how an investment fits in with your overall portfolio.”

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This post originally appeared on 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.