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Social media platforms like TikTok, Instagram, and YouTube are full of self-proclaimed experts offering financial tips, investment hacks, and debt solutions in short form content. While it’s easy to scroll through reels listening to financial advice that promises to change your life in 30 seconds, you need to stop and ask yourself: Is this person really helping you or are they just chasing likes, followers, and sponsors?
Read this article to learn why you should be cautious when taking financial advice from social media, how to identify bad financial advice, and what you can do protect your financial future.
Finance-related content is booming across TikTok, Instagram, and YouTube. On TikTok alone, the hashtag #personalfinance has over 6 billion views. These videos are often quick, flashy, and easy to digest. They speak your language, appear relatable, and seem to offer solutions to problems you might be facing like saving for a home, managing credit card debt, or investing in shares or crypto.
According to the Australian Securities and Investments Commission (ASIC), around 33% of 18-21 year olds report that they have acted on financial advice from social media, often without verifying the source or accuracy of the information.
The most dangerous thing about financial influencers is that they often deliver one-size-fits-all advice that ignores the specifics of your individual circumstances. Your income, goals, debts, and responsibilities all play a role in determining what financial strategies will work best for you. Social media finance advice tends to ignore these nuances. They have to deliver their advice quickly and in an entertaining way to get people to watch the entire thing so it’s not possible to explain the topic in detail.
One popular but risky trend, for example, encourages young people to use "Buy Now, Pay Later" services to build a credit history. While it sounds harmless on the surface, this type of advice can quickly lead to debt and poor credit scores if payments are missed. Another example is the aggressive promotion of cryptocurrency and "meme stocks" with promises of massive returns, often without disclosing the enormous risks involved.
These posts come across as polished and confident, but they rarely come with disclaimers or details about qualifications. Unlike licensed financial advisers who must meet strict professional standards, influencers operate with no oversight. This makes financial misinformation very common.
In 2022, ASIC warned influencers that they could face serious penalties for providing unlicensed financial advice from social media. Some have already been fined or banned for misleading claims, particularly those promoting high-risk investment platforms without being licensed to do so.
Several Australians have reported losing thousands of dollars after following Instagram money tips or TikTok finance advice that encouraged risky trades or crypto investments. Others have fallen victim to online financial scams disguised as legitimate advice.
While many influencers may genuinely want to help, their content can lead you down a path that isn’t right for your situation. Even worse, it could put your financial security at risk.
Rather than relying on social media, seek advice from people who are regulated, experienced, and trustworthy. A qualified financial adviser or Certified Financial Planner (CFP) can help you create a financial plan tailored to your unique needs and goals. These professionals are bound by legal and ethical standards and are required to give you advice that’s in your best interest.
ASIC’s Moneysmart website is another excellent resource for improving your financial literacy. It provides easy-to-understand information on topics like budgeting, superannuation, debt management, and investing, all written by experts and free from commercial bias.
When used purposefully, social media can be a great source of ideas, motivation, and community. You can use platforms to discover new ways of thinking about money, stay up-to-date with trends, or hear real stories from people like you.
The trick is to treat financial content online as inspiration, not instruction. Always verify what you see by cross-checking facts with reliable sources, like Moneysmart or the websites of licensed financial planners. Look for creators who disclose their qualifications and clearly separate opinion from fact. Avoid those who focus on selling products or use hype to drive urgency.
You can also follow licensed professionals who use social media responsibly. They often offer general tips that are consistent with industry standards and encourage their audience to seek individual advice when needed. Just make sure to confirm that they’re registered with ASIC and operating within the law.
Financial advice from social media should never replace tailored, professional advice. While it’s tempting to try out what’s trending, the consequences of getting it wrong can follow you for years. Your finances are too important to be guided by an algorithm.
Take the time to build your financial literacy, ask questions, and seek out advice from sources that are accountable, transparent, and focused on your success —not their follower count.
The dangers include being misled by unqualified influencers, falling for scams, acting on bad financial advice, and making decisions based on trends rather than facts. These risks can lead to debt, poor investments, and long-term financial harm.
One major downside is the lack of regulation. Unlike professional advisers, influencers aren’t required to act in your best interest. Their advice may be biased, incorrect, or based on earning sponsors.
Good financial advice helps you make informed decisions that can improve your long-term financial wellbeing. It’s not just about saving money or investing but about understanding your goals and choosing the right strategies to reach them.
According to ASIC, financial advice includes recommendations or statements intended to influence a person’s decisions about financial products such as superannuation, shares, or insurance. Only licensed professionals are legally permitted to provide personal financial advice.
We understand that financial decisions should be based on your unique situation, not a one-size-fits-all message. Call us on 1300 728 875 or contact Darcy Bookkeeping & Business Services for help making informed choices backed by real experience, not social media hype.
