Financial influencers have built up a strong follower base in recent years, sharing a range of tips on social media, but there are concerns that people could lose money by following their advice.
Research by Barclays Smart Investor recent found that a quarter of Brits, mainly the younger generations, are turning to social media, community messaging apps and online forums for investment guidance.
It comes as the Financial Conduct Authority (FCA) has been stepping up its enforcement activity around social media, amid fears of scams.
The City watchdog amended or withdrew almost 20,000 financial promotions in 2024 – a 97.5 per cent increase from 2023. It also issued 2,240 alerts about unauthorised firms and individuals, many involving misleading promotions on social media.
Earlier this year, three Love Island stars were among social media influencers charged with issuing unauthorised communications of financial promotions for high-risk trading contracts on their social media platforms.
There are plenty of financial influencers – or “finfluencers” as they are known – sharing money tips online, particularly across Instagram and TikTok, where the content is referred to as ‘fintok’.
Bringing finance talk mainstream
Vix Leyton, consumer expert at financial wellbeing website thinkmoney, said finfluencers have done some really useful work by making money part of everyday conversation.
She said: “No-Spend challenges and the FIRE movement aren’t for everyone, but they’ve helped young people think about money as a choice rather than a mystery, which is a good thing.
“The danger is that regulated financial firms aren’t allowed to hand you a neat ‘do this’ answer, so influencers have stepped in and filled the gap, but not necessarily with things that are accurate. When you’re already stressed about money, it’s easy to grab onto the first confident voice telling you what button to press, but that’s often just personal opinion, not a plan that’s guaranteed to work for you and your circumstances.”
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While many are just sharing approaches they have used themselves, others have gone further in promoting financial products they are not regulated for.
This could mean losing money and not having any of the recourse you would have from a regulated bank or asset manager if you were mis-sold an unsuitable product.
In contrast, regulated financial advice offers consumer protection as financial advisers are qualified, are required to act in a client’s best interests and their guidance is tailored to the individual. If something does go wrong and you think you have been mis-sold, you can also complain to the Financial Ombudsman Service.
Sushil Kuner, head of financial Services at law firm Freeths, said: “Finfluencers can make financial topics more accessible and engaging, especially for younger audiences who may not connect with traditional financial media. However, the risks are significant when influencers issue financial promotions illegally, lack regulatory understanding and promote high-risk products without proper warnings.”
So how do you know if financial advice on social media is reliable, and how can you avoid getting caught out?
Watch out for ‘guaranteed’ returns
Beware of influencers promising guaranteed returns, often through high-risk schemes.
Carl Hazeley, chief executive of finance app Finimize, said: “There are clear warning signs, anyone promising guaranteed returns or ‘get rich quick’ schemes, finfluencers who don’t disclose their own positions or potential conflicts of interest, and content that oversimplifies complex investment decisions into ‘buy this now’ soundbites.
“If someone’s dismissing the importance of diversification or risk management, for example, that’s a red flag.”
Ian Futcher, financial planner at Quilter, added: “Sometimes the people behind these accounts are incentivised to promote products or eye-catching returns rather than provide balanced guidance.”
Separate education from advice
Social media can be a good starting point to learn about a subject but Maxine McCreadie, personal finance expert at UK Debt Expert, says it shouldn’t be taken as the final word.
She said: “There are some fantastic voices online – people like Clare Seal, who hosts the Help Me I’m Poor podcast, have helped to break down stigma and get more people talking about their finances. That can only be a good thing.
“Where the risks creep in is when influencers present their own personal experience as one-size-fits-all advice, or worse, when they promote products without being clear about their qualifications.
“What works for one person might not work for another, and in some cases could even put people in financial difficulty.”
Check for caveats
As with any financial issue, always check the small print.
Joseph Black, co-founder of social media influencer agency SHOUT, said not all content is created equal.
He said: “Look for transparency: is the content sponsored, does the creator share risks as well as benefits, and are they pointing viewers toward credible, regulated sources?
“Finfluencers can be a fantastic tool for improving financial literacy, but people should always validate what they see online against trusted institutions or licensed advisors before acting on it.
“Done responsibly, this space has huge potential but it needs to be grounded in transparency, education, and accountability to avoid the pitfalls of bad advice going viral.”
Just because some posts may not be highlighted as ads, that doesn’t mean you can believe them wholesale, added Leyton.
She said: “Regulators have set rules, but loopholes and the sheer noise of social media mean not everything gets caught. Be extra suspicious of anything ‘celebrity backed’; if it looks like Martin Lewis is suddenly shilling a miracle crypto scheme, it’s not him, it’s a scammer exploiting his credibility.
“By all means, be inspired, but check it against trusted sources before you make any big-money moves.”
Do your own research
Influencers are often posting about their own personal experiences so their advice will not be tailored towards your needs, financial goals or risk appetite.
That is why it is important to do your own research.
Clare Francis, director of savings and investments at Barclays Smart Investor, said: “Investment information on social media isn’t tailored to your personal circumstances, even if you typically resonate with the influencer in question. Have a look at whether the investments they’re talking about are sold on any regulated investment platforms – steer clear if they’re not and even if they are, do some additional research to make sure you’re comfortable that it’s appropriate for your needs.”
Scammers also often target investors on social media.
Look for online reviews and use the FCA’s ScamSmart Investment Checker to make sure the firm promoting the investment isn’t on their warning list. You can also check if a company or individual is regulated by checking the Financial Services Register.
When investing, your capital is at risk and you may get back less than invested. Past performance doesn’t guarantee future results.
