More than half of people who have acted on financial advice they came across on social media said they ended up losing money, according to a bank.
Of the 31% of people who said they had acted on financial advice on social media platforms, 55% said they had lost money, the research, commissioned by TSB, found.
Nine in 10 (90%) people surveyed had seen an investment opportunity on social media, and more than two-fifths (43%) would consider investing as a result.
The survey also revealed that more than two-fifths (43%) of people felt worse about their finances after seeing posts about wealth on social media.
Sixteen to 24-year-olds were the most likely to feel downbeat after seeing posts about wealth (67%), followed by 25 to 34-year-olds (61%), with only a fifth (22%) of over-55s saying they felt worse about their finances.
More than 1,800 people who use social media were surveyed by Censuswide in June, for TSB.
Surina Somal, director of everyday banking at TSB, said: “While there could be useful sources of financial advice on social media platforms; there are also pitfalls through incorrect information and unregulated investments that could derail your finances.”
She said that people should do their research to check that content is accurate, before jumping in.
Information about products such as mortgages or savings accounts can be checked with banks or brokers, she added.
Ms Somal also cautioned against “get rich quick” promises and claims about unrealistic returns. Some claims could be scams.
People can also check the Financial Conduct Authority’s financial services register on its website for firms and the regulated activities that they have permissions for.
Last month, a crackdown took place to protect social media users from rogue promotions by some financial influencers, or “finfluencers”.
The week of action started on June 2 and involved the Financial Conduct Authority (FCA) in the UK as well as regulators from other countries.
Many financial influencers acting legitimately and are not breaking any laws – but others may tout products or services illegally and without authorisation through online videos and posts, where they use the pretence of a lavish lifestyle, often falsely, to promote success, the FCA said in June.
Steve Smart, joint executive director of enforcement and market oversight at the FCA, said in June: “Our message to finfluencers is loud and clear. They must act responsibly and only promote financial products where they are authorised to do so – or face the consequences.”
Jenny Ross, Which? Money editor, said: “Having a large following on social media doesn’t mean that someone can be trusted to give financial advice. In the worst cases, they may even be promoting scams.
“Take the time to carefully consider any financial decisions, and don’t allow yourself to be pressured by what you see online – particularly when it comes to investments. However you invest, there’s always a risk that you could lose money. Always keep in mind that if an opportunity sounds too good to be true, it probably is.”
