What do you think of when you think of TikTok? The old Facebook days where everyone would write statuses about their days and post pictures for their families to see?
While some people do still use social media sites to share things with their friends, it’s become increasingly evolved since then. TikTok hit the world by storm during the lockdowns of 2020 and it hasn’t stopped gaining traction since. What started as fun dances that everyone was emulating, has turned to major brands advertising their products, doctors and scientists educating the public, politicians campaigning, and financial advisors discussing basic financial literacy.
Gen Z, the generation who’s increasingly interested in innovating, entrepreneurship and shaking up the status quo has even been polled and said that TikTok and YouTube are their preferred sources of financial advice.* Does that make TikTok the new financial advisor?
Not so fast, a big part of financial advice is developing a personal strategy when it comes to your money. It’s not blanket advice that can just be given over the internet. Also, there’s millions of people on the platform, making it difficult to know who to trust. From licensed advisors, to coaches, business owners, and Cousin Joe who lives in his mom’s basement, anyone can film a quick video, hashtag #finance, and claim to be trying to help you. So if you’re on TikTok and that’s where you primarily get your information, what should you do?
- Take it with a grain of salt. Understand that some of these strategies that people talk about may work for one person but may not be right for you. Furthermore, they may be downright incorrect, or they might be using information from the past whereas legislature has changed and those rules no longer apply.
- Vet the person giving the advice. Click into their profile, search them on the internet, if they’re licensed look up to see if they have any disclosures you should be aware of. At best, you’re dealing with a true advisor, they are likely giving general financial information on their platform in the hopes that you reach out to them and potentially become a client. At worst, it’s someone who just lost a lot of money day trading on information they received on Redditt and now they’re trying to create a platform to earn income elsewhere.
- Understand the difference between education and advice. Becoming financially literate is extremely important and getting reliable information from trusted sources can certainly come from social media. But this is not financial advice. Financial advice is personalized, specific, and something that needs to be analyzed and adjusted over time. Just by learning to invest in a Roth IRA does not mean that’s a strategy that would work for you specifically. For advice, find a specific wealth advisor you value, build a relationship with them, create a financial plan, and work hand in hand to pursue your goals together.
Ultimately today’s social media is much more than a gathering space for friends to hangout virtually. It’s a shopping mall, it’s an education center, it’s a news source. But it’s still not YOUR financial advisor. It’s okay to learn about money management and strategies out there to grow your assets, but make sure to take those ideas to your specific advisor to see if they are accurate and a viable solution for your financial needs.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
*Source: https://www.tubefilter.com/2022/07/22/tiktok-and-youtube-are-gen-zs-trusted-sources-for-financial-advice-according-to-a-new-survey/