In brief
- Nearly two out of three respondents said they had logged on to social media platforms to seek financial advice.
- The ASIC says financial information on social media and accessed through AI tools can be incomplete, promotional or misleading.
Social media has become the go-to source for financial investment guidance among young adults, with a notable portion turning to artificial intelligence for insights.
According to a study by the Australian Securities and Investments Commission (ASIC), 56% of Generation Z individuals, aged 18 to 28, express a degree of trust in financial information sourced from social media.
Approximately 63% of respondents admitted to using social media platforms to gather financial advice.
The survey, which included 1,227 participants, revealed that 30% watched YouTube for financial tips, while 18% sought guidance through AI tools.
Among those surveyed, over half, or 52%, expressed trust in financial influencers, commonly known as “finfluencers,” and 64% believed in the reliability of AI platforms.
However, Alan Kirkland, an ASIC commissioner, cautioned that using social media for financial guidance could be risky.
“Financial information on social media and accessed through AI tools can be incomplete, promotional or misleading,” he said.
“While gen Z value credibility when seeking financial advice, the information they see most often is shaped by algorithms that are designed to drive clicks and views rather than providing accurate information.”
The study found gen Z also had a strong appetite for reputable and trustworthy financial content, with 60 per cent reporting they used formal or professional sources.
But their personal research often led them down a virtual rabbit hole of unreliable accounts designed for engagement rather than accuracy.
Almost one in four members of gen Z own cryptocurrency at 23 per cent, and of these individuals, 66 per cent take a short-term speculative approach to at least some of their crypto investment.
But nearly a third — 29 per cent — said they trade based on social media and influencer content or recommendations.
The financial watchdog said that strategy set unrealistic expectations about returns, price volatility and the realities of long-term investing.
ASIC reminded those in that cohort wanting to invest wisely to access free, reliable and independent guidance through the government’s Moneysmart website.
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