A recent study by blockchain technology hub Social Capital Markets reveals a troubling trend: 71% of financial advice consumed by younger generations on social media platforms is misleading. With nearly 80% of young adults turning to social media for financial guidance, according to a separate Forbes survey, employers and retirement plan advisors need to provide reliable financial education alternatives.
The Social Capital Markets study’s findings underscore the magnitude of misinformation circulating on platforms like TikTok and Instagram. Among the most concerning statistics: 83% of financial advice videos lack proper disclaimers, 70% promote specific stock investments without adequate risk disclosure, and only 13% of influencers possess relevant financial qualifications.
As younger workers increasingly rely on social media for financial guidance, employers must step up to provide credible alternatives. Sudhir Khatwani, Founder and Head of Research at Social Capital Markets, who was quoted in a recent BenefitsPro article citing the study results, emphasized the importance of workplace financial education programs to combat this trend.
He offered up the following strategies for employers to consider:
- Host regular financial literacy workshops and webinars led by certified professionals
- Partner with qualified financial advisors to conduct employee Q&A sessions
- Provide access to reputable financial planning tools and resources
- Develop internal communications that highlight the risks of unverified financial advice
According to Mr. Khatwani, employers should also consider offering access to tools and resources such as the following to help support employee financial education:
- Budgeting software solutions like Mint or YNAB (You Need a Budget)
- Retirement planning platforms such as Guideline or Betterment for Business
- Certified financial planners (CFPs) or fiduciary advisors
- Subscriptions to reputable financial news sources, such Forbes, Bloomberg, and The Wall Street Journal
- Regular educational content from established financial institutions
The study identified Gen Z and millennials (ages 18-41) as particularly vulnerable to misleading financial advice on social media. Their preference for quick, accessible information and proclivity for social media engagement makes them susceptible to influencer-driven content that often oversimplifies complex financial decisions.
By implementing the measures and strategies discussed above, employers and retirement plan advisors can help counter the flood of misleading financial advice on social media while providing their employees with the tools and knowledge needed for sound, empowered financial decision-making.
