Why you shouldn’t trust all ‘finfluencers’ on TikTok for financial advice

TikTok is huge. It’s evolved from being known for lip-synching and dance videos during lockdown, to becoming a powerfully influential platform for anyone sharing news, education, lifestyle tips and much more. 

Basically, anything you can think of to search for, you’re bound to find it on TikTok, along with many gurus proclaiming to be experts in anything and everything.

Powerful algorithms populate people’s ‘For You’ feeds, highlighting a never-ending supply of videos that TikTok thinks you might find useful, interesting, or entertaining.

Financial advice is no exception to the saturation of content on TikTok. It’s a popular source of information for many individuals, particularly the younger generation who are drawn to its short and engaging video format. 

Apparently, one third of the Gen-Z population heads to TikTok for financial tips and know-how.

However, although TikTok may be bursting with financial advice, by ‘finfluencers’ bombarding with you information packaged up in an entertaining way, it doesn’t necessarily mean that their advice is accurate, or appropriate for you.

Our expert team of qualified and experienced financial advisers at PIL Southampton advises you to take what you see on TikTok with a pinch of salt. 

Here’s why… 

Anyone can claim to be an expert on TikTok

You don’t have to have any credentials or qualifications to set up a TikTok account and proclaim yourself to be a financial expert. Of course, there will be many bona fide financial advisers publishing content on TikTok, but there will also be many who have no financial qualifications or experience in the field at all, just their own ‘armchair expert’ opinions. 

In the hands of money enthusiasts, who have no formal qualifications, a little information, as they say, can be dangerous.

The person in the video may not be regulated or accredited 

If you like what you hear from a financial adviser on a TikTok video and are thinking about taking their advice, check their background and make sure you’re taking advice from a qualified financial adviser who is registered with the Financial Conduct Authority (FCA) and therefore bound by their rules. You can search anyone on the FCA register here. 

The finfluencer on TikTok might be a great presenter, but charisma doesn’t equal credentials.

Anyone who is not registered with the FCA, and is without the required permissions, has no business giving financial advice. Without these qualification and permissions, it is a criminal offence to give regulated financial advice.

The information could be misleading 

There can be a financial motivation for a Tiktoker to create attention-grabbing videos that will generate more views and likes – if they’re really successful and they clock up high numbers, their videos will be monetized and could become quite lucrative. 

This potential jackpot could mean that they prioritise entertainment, sensationalism, and wild claims over sound financial advice.

You cannot be certain that the promotional material they post has been approved by a suitably qualified person. Content must be fair, clear, and not misleading. 

If the TikToker producing financial content isn’t a qualified financial adviser, they may be sharing misleading or out of date information, possibly unintentionally.

It’s not personalised advice 

The financial advice you’re hearing on TikTok may not suit your circumstances. You should only trust advice that is given to you by a qualified financial adviser who has taken the time to find out all about you and your financial situation – your income and expenditure, your aspirations, risk tolerance and so on.

It’s worth noting that advice on TikTok is often wrapped up as snappy soundbites. Owing to a lack of an explanation, you may not get the full picture or enough context of a potentially complex topic to enable you to fully understand the product that’s being recommended to you.

The person may be receiving financial incentives to promote certain content

Some so-called finfluencers are paid to promote certain products that they may not even understand themselves. 

As their title suggests, they can potentially influence individuals who could be persuaded to buy a product that might not be suitable for them, or that might be artificially inflating claims.

The Financial Conduct Authority is clamping down on these kinds of money adverts. They have found that consumers who use social media as a source of advice to help them make financial decisions are more likely to come across promotions that are unclear, misleading, or unfair, which could lead them to make financially detrimental decisions.

It could be a scam

Sadly, criminals are wily and innovative. There’s no doubt that many scammers have jumped on the TikTok bandwagon to lure their next victims. 

You need to be very careful and very slow to trust what you see and what you hear. These people are incredibly sophisticated and believable but, if their claims seem too good to be true, like an investment opportunity with unbelievably high returns, they probably are. 

Do your own research, check out the facts before you consider signing up to anything, and consult a professional.

How PIL Southampton can help you 

You can trust our expert team of financial advisers to give you honest and genuine advice. Regulated by the FCA, they will take good care to get to know you and your individual circumstances, helping you to find the most suitable financial solutions that should best suit your needs. 

How you can contact PIL Southampton

You can email us, fill out the contact form on our website or call us on 02380 668407. We look forward to hearing from you.