Clients using social media for advice likely to getting misinformation most of the time

Clients using social media for advice likely to getting misinformation most of the time
An analysis of financial advice shows high levels of bad information.
OCT 28, 2024

Younger Americans are the most likely to be using social media for information on investments and other financial advice and this approach is frequently risky.

A new analysis of social media video posts relating to investing in equities highlights just what a ‘wild west’ major platforms are in this regard, with users attracted by hashtags promising the next big stock pick.

Social Capital Markets looked at more than 2,700 stock-related videos on YouTube, TikTok, and Instagram and found a startling level of misinformation and lack of basic messaging around claims being made.

More than eight in ten videos omitted disclaimers informing viewers of the risks of investing, while seven in ten did not give context to the specific stock investments they were recommending and again, often without warning of the risks.

Worryingly, almost six in ten videos promised guaranteed returns and 45% suggested a specific proportion of income should be invested.

The analysis also found that just 13% of the videos were from sources with the relevant qualifications or credentials to offer financial advice.

The report reveals that 91% of the TikTok videos included lacked disclaimers along with 88% of those on Instagram and 76% of the YouTube videos.  For encouraging particular stock purchases, YouTube was the worst with 75%, followed by TikTok (70%) and Instagram (65%).

Overall, TikTok is deemed the worst with a higher rate of videos promising guaranteed returns and recommending specific percentages of income should be invested.

The study was conducted by a team led by Sudhir Khatwani who has made significant contributions as a Programmer Analyst at Cognizant, where he worked on critical projects for leading financial institutions like MUFG and CITI Bank.

Latest News

Mercer Advisors, Osaic deepen AI bets with Arch and Nitrogen deals
Mercer Advisors, Osaic deepen AI bets with Arch and Nitrogen deals

Arch claims 40% operating cost savings for Mercer as Nitrogen unlocks its agentic AI and tech suite to 10,000 Osaic advisors

LPL advisor, South Carolina state senator, elected to U.S. Congress
LPL advisor, South Carolina state senator, elected to U.S. Congress

A happy coincidence: one of LPL Financial’s corporate campuses happens to be based in Rep.-elect Wes Climer’s new district.

Advisor moves: JPMorgan lands $940M Merrill veteran in Los Angeles
Advisor moves: JPMorgan lands $940M Merrill veteran in Los Angeles

Wells Fargo and UBS also add advisors from Morgan Stanley, Edward Jones, Merrill and Fidelity in a fresh round of wirehouse recruiting

Wall Street products, Main Street regulators
Wall Street products, Main Street regulators

How we got here – and what to do about it

Most Americans are OK with AI managing their money - but not how you think
Most Americans are OK with AI managing their money - but not how you think

AI trust gap: Americans want protection, not autonomy, in their finances

SPONSORED Built on insurance experience to deliver on long-term promises

Knighthead Life entered the market with a competitive MYGA. A strong launch earned advisor confidence and paved the way for FIAs.

SPONSORED In the Age of AI, Trust Becomes the Advisor's Greatest Asset

As AI makes financial information more accessible than ever, Lana Hock explains why human judgment, trust, and empathy remain the qualities clients value most in a financial advisor