Mercer warns 80% of financial content is unregulated

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In the age of social media, the financial advice landscape is undergoing a transformation.  Platforms like TikTok and YouTube are becoming primary sources of financial content, reshaping financial literacy.  However, concerns are mounting over the quality and regulation of this information. Mercer’s recent report ‘Retirement support in 3 years’ time: Where will you turn?’ highlights that 80% of financial content on social media is produced by individuals with no formal qualifications, posing significant risk to consumers. 

Research indicates:

• Nearly 1 in 10 individuals consult sites like YouTube for financial advice¹
• TikTok’s #Fintok hashtag has amassed nearly four and a half billion views.²
• Nearly two-thirds (62%) of 18-29-year-olds follow finfluencers, and 74% of them trust their advice.³
• Nine in ten young followers report being encouraged to change their financial behaviour⁴ based on finfluencer content. 

So, what’s the attraction? Why are they doing this? It may be because they trust the individual, particularly if they are a social media star or celebrity. Celebrity endorsements, after all, are nothing new. But also, because the advice is generally affordable, free, and accessible. One in five (19%) consult ‘finfluencers’ because it provides them with “free access to financial experts,” while a quarter (26%) say that this style of content is “quick and easy to use”.⁵  

However, while this advice is quick and convenient, it isn’t personalised. Just like instant coffee isn’t tailored to your taste, finfluencers aren’t responding to an individual’s personal situation. This lack of personalisation can lead individuals to make decisions that aren’t suitable for their circumstances.     

The influencer industry has grown significantly. Since 2020, more than 8 million individuals have joined the UK creator economy. Approximately 25% of the UK population, or 16.5 million people, describe themselves as content creators.⁶ Finfluencers are a growing part of this industry, with some earning six-figure sums.⁷

Risks and challenges

While finfluencers are filling a gap in financial literacy, they also pose risks of misinformation, scams, and unqualified advice. Worryingly, a survey of 2000 people found that 74% of followers who acted on information received from social media have experienced financial losses or undesired outcomes.⁸

Recognising these risks, the FCA has recently collaborated with international regulators to protect social media users from illegal financial promotions. In the UK, the FCA issued warning alerts that led to 650 take-down requests on social media platforms and more than 50 websites operated by unauthorised finfluencers. Additionally, in collaboration with the City of London Police, three arrests have been made in connection with these activities.⁹

Implications for the industry

“The reality is that consumers will continue to seek financial information from social media, whether we like it or not,” says Tom Higham, Head of Engagement, Mercer Master Trust. “Expecting them to avoid these sources entirely is unrealistic, much like doctors telling patients not to Google their symptoms. 

“Finfluencers have highlighted a vital need, to make advice accessible and affordable. Rather than viewing finfluencers solely as competitors or threats, we need to learn from their approach. They excel at breaking down complex topics into digestible, engaging content that resonates with audiences. The industry must adapt by engaging with these platforms, improving the quality of information, and guiding consumers towards regulated, trustworthy advice. Education is key, empowering consumers to critically evaluate advice and recognise credible sources is essential.”

While finfluencers are not a substitute for regulated advice, they serve as a wake-up call for the industry to innovate and meet consumers where they are, on social media. By embracing these channels responsibly, the industry can help bridge the advice gap, improve financial literacy, and ultimately, support better financial outcomes for all.

The Mercer Master Trust is provided by the Mercer Master Trust Trustee Board acting in conjunction with the founder of the Mercer Master Trust, Mercer Limited, which is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales No.984275. Registered Office: 1 Tower Place West, Tower Place, London EC3R 5BU.

Read the latest news, expertise and thought leadership from Mercer workplace pensions experts – here.

^{1Nearly 1 in 10 Brits Rely on YouTube for Financial Advice, Despite Only 26% Believing It’s a Trustworthy Source}

^{2A third of Gen Z look to TikTok ‘finfluencers’ for financial advice | This is Money}

^{3The rise of finfluencers: Who are they and why are they causing concern? | ITV News}

^{4The rise of finfluencers: Who are they and why are they causing concern? | ITV News}

^{5Clare Francis on social media and ‘finfluencers’ | UK economy | Barclays}

^{6The UK Creator Economy Statistics, Trends, and Analysis 2023 – Investingstrategy.co.uk}

^{7Should you trust personal finance advice from a ‘finfluencer’? – BBC Worklife}

^{8Where do people go for financial guidance? – Capital One}

^{9FCA leads international crackdown on illegal finfluencers | FCA}