Research from Fidelity International found that two-fifths (40%) of UK investors have used social media to inform their financial decisions within the past two years.
The study by the investment firm found that investors are increasingly turning to internet searches, financial influencers – ‘finfluencers’ – and artificial intelligence (AI) tools such as ChatGPT for investment advice.
Where are investors seeking advice?
According to the study, as well as 40% of UK investors using social media to inform their financial decisions over the past two years, one in eight have also used top results from internet searches (11%) and finfluencers (12%).
Fidelity found that while half (49%) of UK investors continue to trust professional financial advisers for investment information, only one in three (34%) have used an adviser in the past two years to inform a financial decision.
The research found that aside from advisers, the most popular source of guidance is money advice websites, trusted by two in five (41%) investors. Financial media is an influential source of advice for 32% of investors, while 27% trust information directly from investment platforms. Meanwhile, a quarter of investors (25%) said they turn to friends and family for investment information.
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One in eight (13%) investors trust top results from internet searches for investment advice. A similar proportion (12%) also trust investment influencers. Meanwhile, less regulated channels such as forums and blogs (11%) and ChatGPT/AI (8%) are also trusted by investors looking for financial guidance.
The advice gap
Only 38% of investors said they currently use an adviser, with 25% having done so in the past – leaving 62% outside the advice system altogether.
Younger investors are the most willing to explore online sources of investment information, such as investment podcasts and internet searches. Older investors, on the other hand, were less likely to trust these sources.
A fifth (22%) of UK Investors said they have used YouTube to help them make decisions around their finances, while 17% relied on Facebook to do so. Other popular forms of social media that drive investor decision-making are X (16%), Instagram (15%), LinkedIn (14%), TikTok (12%), Reddit (8%), Threads (5%), BlueSky (3%) and Red Note (2%).
Ed Monk, associate director at Fidelity International, said: “Our research highlights the significant value placed on financial advice among those who have received it: 63% believe advice from an IFA is crucial to achieving their goals, and more than half (55%) say advice has improved their financial position. However, many are simply not in a position to access professional advice.
“In the absence of advice, people are turning to other channels, some reliable, but many unregulated and unverified. From influencers to AI and social media, the risk of relying on non-authorised sources is real and could result in poor financial decisions.
“That’s why we welcome efforts to close the advice gap through more accessible, targeted support. This should include flexibility for providers to engage customers at relevant points in their journey, without overly prescriptive rules. We believe interventions must also be deliverable to those who need it most, even where traditional marketing permissions don’t currently allow for it.”
