Quality of Finfluencer Content: A Detailed Study
With the advent of social media, the financial advice industry has seen a surge in financial influencers, or ‘finfluencers’. However, recent research from Queen Mary University of London suggests that the quality of advice given by these finfluencers is generally low, despite their widespread popularity. This article delves into the details of this research and its implications for social media users who rely on these finfluencers for financial advice.
The Research: Methodology and Findings
The research, funded by Aberdeen Group Charitable Trust, analysed almost 2,500 finfluencers across three major platforms: Instagram, TikTok, and YouTube. The researchers also surveyed over 4,200 adults aged 18 and above across the UK to understand the impact of these finfluencers.
The study revealed that most financial guidance posts are created by independent content creators rather than authoritative sources like the Money and Pensions Service or the Financial Conduct Authority. After examining around 1,000 posts from each platform, researchers found that nearly nine out of ten posts demonstrated more negative than positive quality features. Surprisingly, only about 9% of posts explicitly stated the creator’s relevant expertise, and just 12-13% included necessary disclosures or disclaimers. As a result, almost 90% of posts contained more negative features than positive ones.
Social Media: A Popular Source of Financial Guidance Despite Low Quality Content
Despite the low quality of finfluencer content, social media remains a popular source of financial guidance. Two out of every five respondents in the survey admitted to using social media for financial advice, citing reasons such as relatability, breadth of information, and ease of access. Around 31% also admitted to acting on advice found on social media in the past year, by applying a financial tip or making a related decision.
Of those who acted on social media advice, 70% reported mostly positive outcomes, while 27% experienced mixed results, and the remaining 3% reported mostly negative outcomes. It was also observed that positive outcomes were more commonly reported by women, frequent social media users, and respondents with higher levels of personal finance knowledge.
Concerns and Verification Methods
While users recognise the potential benefits of financial guidance on social media, they also acknowledge its limitations. Common concerns include untrustworthy information, a lack of financial qualifications among creators, and potential bias. Almost all respondents (94%) claimed they verify the information they see. However, the study revealed that many users rely on weak checks such as reading the comments. Fewer respondents (58%) checked the credibility of the source, while only 49% compared information with reputable websites.
Variation in Quality Across Platforms
The quality of financial guidance varied significantly by platform. YouTube posts consistently included more positive quality features than content on Instagram or TikTok. Nearly one in five YouTube posts stated the creator’s expertise, compared with just 2.2% on Instagram and 3.9% on TikTok. This highlights the need for users to be discerning about the platforms they use for financial advice.
Limited Awareness of Online Financial Content Rules
The study also pointed out that over half of the respondents were unaware of the legal distinction between ‘financial guidance’ and regulated ‘financial advice’. Additionally, four in ten respondents were surprised to learn that most financial guidance on social media is unregulated.
Expert Opinions
Kristina Church, chair of the Aberdeen Group Charitable Trust, stressed that responsibility for the quality of financial information on social media should not sit solely with the regulators. She emphasised the importance of platforms in ensuring that the financial content shared online meets basic standards and does not mislead users. Eileen Tipoe, the author of the report from Queen Mary University of London, echoed this sentiment. She pointed out a gap in the level of influence of financial guidance on social media and the oversight it currently receives.
In conclusion, while finfluencers can provide useful financial tips, the general quality of their advice is low, and users need to exercise caution. For reliable financial advice, users should turn to trusted sources and verify the information they receive on social media.
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