Social media arre becoming Gen Z's financial advisor

The influence exerted by social media on increasing attention to certain topics, including the management of one's economic resources and financial education, has become increasingly evident. According to a recent survey by fintech company Credit Karma, reported by the U.S. magazine WWD, more than 75% of Gen Z youth in the United States actively seek financial advice online. However, while this trend was once seen as a sign of self-determination and a willingness to learn about complex economic issues, today several risks associated with the phenomenon are also emerging. Many observers have long wondered whether—on these platforms—all this attention to money has become excessive. The survey conducted by Credit Karma found that 43% of Americans seek financial information exclusively on social networks, with significantly higher percentages among Gen Z (77%). The most used platforms for obtaining financial advice are YouTube (71%), Instagram (50%), and TikTok (49%), followed by X at 36% and Facebook at 31%. Other channels, such as financial blogs, podcasts, or fintech websites, paradoxically have lower usage rates—between 11% and 25%.

The main financial topics that young people seek information about online include budget management, stock market investments, and wealth accumulation. An interesting aspect that emerged from the survey is that many under-30s do not just seek information but actually put into practice the advice they find on the Internet: 60% of Gen Z, for example, stated that they had made investments based on financial tips found on social networks. On the one hand, the increased discussion about money has helped reduce the stigma surrounding this topic. On the other hand, however, the tendency to frequently discuss financial matters on channels used daily by millions of people, regardless of the expertise level of those sharing the information, has also generated a series of counterproductive effects. One of these is the inclination of many young people to make investments—sometimes risky ones—too superficially.

The Dangers of Financial Advice on Social Media

Although 67% of Gen Z and 60% of Millennials claim to have improved their financial situation thanks to advice found online, for some young people, the consequences have been negative. The research by Credit Karma reveals that 37% of Gen Z and 25% of Millennials reported having economic problems after following suggestions found on social media. Additionally, a quarter of young respondents stated that they had been victims of scams by self-proclaimed financial experts. Courtney Alev, a financial consultant at Credit Karma, speaking with WWD, reminded that «personal finance is, by definition, personal»: in this field, therefore, there are no universally good pieces of advice, as each individual has a unique financial profile.

In this context, the role of financial institutions could become even more relevant in the future in providing reliable educational resources that are accessible to young consumers. «While social media platforms, and the Internet in general, offer immediate access to a vast amount of useful information, it is essential that consumers conduct proper research and verify the advice received online before making financial transactions,» says Alev, emphasizing the importance of consulting experts if one intends to make financial investments. Many scholars even argue that financial education courses should be included in schools and universities so that young people can develop critical money management skills in a “protected” and less hostile environment than the Internet.