Survey finds that some positives can be found in social media advice
Why do some Canadians follow the advice of finfluencers? And is the advice all bad?
The rise of financial influencers on social media has caused concern among regulators with the Ontario Securities Commission recently finding that a third of Canadians have followed advice from these sources and last month the Alberta Securities Commission took action against a finfluencer that it said breached securities laws.
But these unregulated sources of financial advice are gaining trust with (particularly young) Canadians who say they have gained positive advice from these channels.
A newly published survey from Tangerine asked 1,000 Canadians specifically about their use of TikTok and found that 89% say it helped improve their financial literacy and 61% said ‘FinTok’ as it’s known, has helped them gain $500 or more compared to 25% who say they have lost $500 or more.
More than three quarters of respondents using FinTok for advice are at the beginning of their financial journeys, making them highly impressionable.
Among users, 60% say they follow investing advice and 53% follow tips on how to look after their money such as the ‘loud budgeting’ trend where people are open and vocal about their spending limits and financial goals.
But among the red flags identified, 48% of respondents admitted they did not review finfluencers’ credentials before following their advice.
“Trust your gut. If something seems off, or it sounds too good to be true, it probably is. When it comes to financial scams, that’s one of the biggest red flags,” says Lora Paglia, Tangerine's Chief Risk Officer.
The survey also found that 61% typically take financial advice from their family or friends and 56% do so from their financial institution or other finance professionals.
