While a growing number of young people are turning to social media for financial guidance, new research suggests much of the advice they consume may be inaccurate, misleading or potentially harmful.
A global report by trading broker FXTM has found that one in four finance-related videos on TikTok, reviewed by researchers, raised concerns about accuracy, highlighting the risks posed by so-called “finfluencers” who offer investment, personal finance and trading advice to millions of followers online.
The FXTM study audited 72 TikTok videos across regions using popular hashtags, including #FinanceTok, #TradingTips, #ForexTips, #CFDTrading and #SideHustle, to better understand the financial content young audiences are consuming.
Among the videos reviewed, researchers identified three that were classified as outright misleading.
All the videos promoted contracts for difference (CFD) trading through unproven trading strategies, while closely resembling legitimate market analysis, notes the report.
Other finfluencers had little to no financial qualifications and are essentially paid marketers or brand ambassadors who prioritise their own monetisation over the consumers’ well-being, adds the study.
“The three outright misleading videos all promoted CFD trading through unproven scalping strategies, using the same format as legitimate analysis: confident voiceovers, chart overlays, bold claimed returns, without any regulation, disclosure, or accountability,” it notes.
Researchers state that the content often appeared professional and authoritative, making it difficult for inexperienced viewers to distinguish between credible market analysis and potentially misleading claims.
“These findings are particularly concerning given the level of trust many young people place in online creators. Our evidence shows that 74% of Gen Z consumers trust finfluencers more than official financial guidance, despite growing regulatory concerns about the quality and reliability of advice circulating on social media platforms,” the study states.
Unregulated advice risks
Lukman Otunuga, head of market research at FXTM, says the growing popularity of financial content on social media presents both opportunities and risks.
“TikTok has democratised financial conversation in genuinely powerful ways; more young people are engaged with markets than at any point in modern history. But democratisation without regulation is a double-edged sword. What our audit shows is that the most dangerous content doesn't look dangerous.”
Otunuga warns that misleading content can have significant real-world consequences for viewers who make investment decisions based on short-form videos.
“A 60-second video can undo years of careful financial planning. The responsibility cannot sit with the viewer alone.”
The report argues that the challenge for regulators is that problematic content often mirrors legitimate educational material. As a result, users may struggle to discern when advice lacks evidence, proper disclosure or regulatory oversight.
The findings come as regulators around the world intensify efforts to crack down on misleading financial content.
According to the report, regulators across 17 countries are taking action against finfluencers, while the UK's Financial Conduct Authority (FCA) has repeatedly warned consumers about relying on unregulated financial advice shared on social media.
Recent FCA enforcement activity has also increased significantly as authorities seek to tackle unlawful financial promotions.
Regulators have increasingly focused on this issue. The FCA has warned that finfluencers often attract young audiences and can encourage followers to alter their financial behaviour, even when the advice is provided by individuals who are not authorised to offer financial guidance.
In SA, the Financial Sector Conduct Authority (FSCA) has identified finfluencers as an emerging consumer protection risk and is actively examining their impact on financial decision-making.
According to the local regulator, the rapid rise of finfluencers across SA’s social media platforms is a double-edged sword – representing both unprecedented opportunities for financial inclusion and significant risks related to misinformation.
“Some influencers fail to adequately disclose paid partnerships or present marketing content as authentic personal experiences, potentially misleading followers,” says the FSCA.
The local financial watchdog has also stressed that “consumers should be cautious about acting on financial information shared by popular online personalities, as influence and visibility do not necessarily equate to expertise or regulatory authorisation”.
Falling for financial hype
To explore the human impact behind the statistics, FXTM interviewed Byron Hyde, a philosopher of science at Bangor University, scientific adviser to the British government and someone who experienced financial losses after following a viral investment trend.
Reflecting on his experience, Hyde says: "I didn't trust one influencer; I trusted an entire environment. When everything you see for weeks on end says ‘invest, invest, invest’, the pressure builds until you cave.”
His comments highlight the influence that recommendation algorithms and repeated exposure can have on investment decisions, particularly among younger users who spend significant amounts of time on social media platforms.
Hyde now studies the psychological factors behind financial decision-making and believes social media creates an environment where confidence can easily be mistaken for expertise.
“Using social media as your source of financial advice is like going to a casino and letting the house decide when you hit or stick on blackjack.”
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