Financial TikTok, or #FinTok, has rapidly become a popular platform for financial tips and advice, especially among Gen Z. The allure of short, engaging videos explaining complex financial topics has captured the attention of millions. However, the convenience and accessibility of this advice come with a significant risk — misinformation.

A recent report by Edelman Financial Engines revealed that 27% of social media users, particularly younger generations, have fallen victim to false or misleading financial advice on platforms like TikTok and Instagram. Alarmingly, 20% of those users have been misled more than once.

With TikTok and other social media platforms filled with content ranging from tax-saving tips to investment strategies, it's crucial to approach these financial tidbits with caution. Jean Chatzky, CEO of HerMoney.com, offered a simple but vital piece of advice: "If it sounds amazing, it’s probably too amazing."

Gen Z's Growing Dependence on Social Media for Financial Advice
Gen Z, often characterized by their preference for online content and influencers over traditional financial advisors, is particularly vulnerable to #FinTok’s influence. A report from the CFA Institute found that this generation is almost five times more likely to seek financial advice from social media compared to adults over 40. This reliance may stem from the accessibility of influencers and the appeal of bite-sized content tailored to their needs.

However, not all advice circulating on social media is accurate or applicable. While some financial influencers, or “finfluencers,” may provide helpful budgeting or saving tips, more complex financial topics, such as taxes or investment strategies, require a deeper understanding and personalized advice that social media often cannot offer. Isabel Barrow, director of financial planning at Edelman Financial Engines, warned that while advice shared online might benefit some, it’s “not a one-size-fits-all thing.”

How to Spot Misleading Financial Advice
Given the rise of misleading content, experts suggest conducting thorough vetting of any financial advice found online. Before following a finfluencer’s advice, consider their qualifications and whether they have potential financial motivations, such as earning commissions through sponsored posts. Consumers are encouraged to cross-check any financial information offered online.

Jean Chatzky emphasized the importance of verifying the source of advice: “Check out who you are listening to and what their background is and whether they actually have the credentials to be leading you down the road you are about to follow.”

To further protect yourself, resources like the CFP Board’s website allow users to verify certified financial planners, while brokers and brokerage firms can be vetted through the Financial Industry Regulatory Authority (FINRA) website. It’s also worth checking the U.S. Securities and Exchange Commission (SEC) site for information on investment advisors.

The Bottom Line
While #FinTok offers an exciting and accessible way for young people to engage with financial topics, it’s crucial to approach the advice found there with a healthy dose of skepticism. As Barrow suggests, "You have to take everything that you hear and see and read on social media with many grains of salt."

Ultimately, personal finances require personalized solutions. While social media might inspire better financial habits, ensuring the accuracy and relevance of the advice you follow is essential for safeguarding your financial future.