A recent survey commissioned by Forbes Advisor and conducted by market research company Prolific found that 79% the millennial and Gen Z generations have gotten financial advice from social media.
Should Individuals Rely On Social Media For Guidance On Their Finances?
Opinions among personal finance professionals are split.
Chartered retirement planning counselor Jake Falcon, founder and CEO of Falcon Wealth Advisors, was skeptical about following financial advice spread on social media platforms, stating that "each individual is different and what applies to one person may not apply to another.”
However, certified financial planner Brian Walsh, manager of financial planning at online financial platform SoFi, believed social media could be a valuable resource for personal finance information if one knew where to look.
He recommended LinkedIn and Twitter as the best sources for reliable insights about personal finance, as they provided context which was important when it comes to personal finances.
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The survey found the majority of millennials and Gen Zers encounter financial advice on social media at least once a week, with 1 in 4 stumbling upon it every day.
Additionally, nearly 70% of those surveyed say that social media has improved their financial literacy.
Financial professionals warn of the risks of obtaining financial advice from social media, as anyone can post anything online without consequence, including bad or inaccurate advice about money management.
They advise social media should only be used for general education about financial matters, and then seek in-depth advice from a certified financial professional.
Furthermore, the Federal Trade Commission (FTC) noted that among 2021 fraud reports citing the victim's age, Americans ages 20 to 29 represented 41% of fraud losses, compared with 18% for people 70 to 79.
The FTC has also branded social media as a "gold mine for scammers."
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