Millions of young people take financial advice from influencers


Millions of young people in the UK are taking financial advice from influencers on social media, research has found.

Financial services communications consultancy MRM, in partnership with Mouthy Money, has revealed that 62 per cent of 18 to 29-year-olds follow financial influencers, with 74 per cent trusting their advice. As a result, nine in 10 young followers have been encouraged to change their financial behaviour.

After following the advice of financial influencers, 40 per cent of young people have cut their spending, 38 per cent have invested in a variety of assets, 32 per cent have used buy now, pay later schemes, 29 per cent have started budgeting and a quarter have paid off debts.

Read more: FCA reveals scale of crackdown on financial promotions in 2021

57 per cent of 18 to 29-year-olds currently invest and over half of those started during the pandemic after the first lockdown was introduced in March 2020, the research found.

30 per cent learned about cryptocurrency from social media or online influencers, just beaten by friends and family (33 per cent). The majority (52 per cent) consider crypto a good investment but only 11 per cent invest in it, compared with shares (24 per cent) or funds (24 per cent).

According to the survey, more young people are putting the environment first with 63 per cent saying they were more likely to invest in an environmental, social, and governance (ESG) fund than crypto (37 per cent).

Read more: Consumers use fintech more than social media accounts

Read more: Fifth of young people use social media for financial advice

“It is excellent to see so many young people engaging with their finances and taking positive, proactive steps to secure their financial future,” said Cem Balci, consultant at MRM.

“Certainly, there is still a place for trusted experts and traditional financial advisers, but it is also clear that viral media may now be the best way of reaching and interacting with younger adults.

“When it comes to investing, young people are of course focused on what will generate the best returns, but there are also signs of an ESG consciousness entering their financial considerations. How to engage that consciousness early on and help to turn ethics into real financial actions is a question that the industry will want to answer sooner rather than later.”

Earlier this month, financial coaching app Claro Money said that new advertising rules banning celebrity promotion should be extended outside of gambling and lottery adverts to cover crypto and day trading apps.

And last year, City regulator chair Charles Randell highlighted an Instagram post from Kim Kardashian for a crypto product that she was paid to promote to her 250 million followers as part of warning that such promotions could pose risks to consumers.

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