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Almost half of UK investors place their trust in social media, Finfluencers and AI tools when making financial decisions as unregulated sources continue to separate consumers from professional advice.
Two-fifths of the UK have used social media to inform financial decisions over the past two years, and new research has been discovered from Fidelity International, despite nearly 50% of consumers expressing trust in their financial advisors.
Only one in three investors who responded to the Fidelity survey had used a specialized, qualified adviser to inform financial decisions over the past two years, but over 60% have never accessed the advice system, indicating that many people have no access to professional advice.
“Many are simply not in a position to access expert advice,” said Andrew Oxlade, director of investment at Fidelity International.
“Without advice, people are turning to other channels. While reliable, many are unregulated and unexamined.”
Fidelity surveyed 1,000 UK investors for analysis.
Two in five survey respondents chose to collect guidance from financial media and money advice websites when asked about family and friends, while others flocked to new, unverified information about social media platforms.
The range of financial influencers, or so-called “Finfluencers,” continues to grow, collecting 12% of information from a variety of platforms, including X, Instagram and Tiktok.
Financial Conduct Authorities recently took action against nine individuals earlier to promote fraudulent trading schemes, making three arrests in the action week in early June.
The FCA also issued 50 warning alerts during Action Week, but said it would lead to over 650 requests to remove content from social media, according to authorities.
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Similarly, 13% of respondents to the Fidelity survey trusted top-level search engine results and strengthened the Internet’s power to promote financial behavior, while 11% and 8% of investors chose web forums and AI, respectively, for financial guidance.
Of those exploring financial information online or new media sources, over 20% of both Gen Z and millennials, or both under the age of 45, choose more reliable Finfluencers, AI, and podcasts over trusted sources, as more young people choose to invest.
However, with the growth of sources at the fingertips of investors, many people have shown “knee jerk and reactionary behavior” in response to market fluctuations, saying “bad financial decisions” were “incorrect.” The platform said a quarter of investors reported that they only bought a few hours after considering a new fund or stock.
“The risk of relying on unauthorized sources is realistic and it could be inadequate financial decisions,” Oxlade said.
While AI tools can provide a “good starting point”, Oxlade tested the importance of the source and emphasized that the proposal is “sane check”.
Research from financial planners divided individual wealth into Schroeder, citing perceptions of cost, independence, and attitudes only for the wealthy as barriers to access advice.
“In the end, consumers deserve consistent, scalable and reliable guidance,” concluded Oxlade.
