Finance Influencers Index Report
Table of Contents
Introduction to the Finance Influencers Index
Key metrics by demographic
2.1 Overall Engagement with Financial Advice on Social Media
2.2 Preferred Social Media Platforms for Financial Advice
2.3 Verification of Financial Advice
2.4 Following Finance Influencers by Region & Application of Overseas financial advice
2.5 Understanding and Verification of Financial Advisors
Why is This the Case?
Knowledge Gaps & Awareness
Online Advice Can Be Dodgy
Recommendations
Regulatory Measures
Introduction to the Finance Influencers Index
In the world of personal finance, social media is playing an increasingly important role in providing accessible and timely tips on budgeting, saving and investing. It also provides a free alternative to traditional and expensive financial advisors. As interest in money and budgeting becomes a far more public conversation in the public domain it seems that more people are creating content or seeking financial guidance from platforms like TikTok, Instagram, and YouTube.
However, when conducting our Bill Stress Index earlier this year, we also noted an alarming linkage between those who use social media for financial advice and increased difficulties in your financial situation. Namely, if you take financial advice off of social media:
You’re twice as likely to pay your bills late
You’re 35% more likely to have anxiety paying your credit card bills everyday
You’re three times more likely to use a credit card
And, you’re 79% more likely to be living beyond your means (over 75% of your income going towards bills).
These trends inspired the creation of the Finance Influencers Index. The purpose of this report is to understand who is using social media for financial advice the most, the platforms they turn to, which demographics are most influenced by these finance influencers (finfluencers) and why sourcing financial advice from influencers may have a negative impact on a consumer's financial situation.
Key Findings
2.1 Overall Engagement with Financial Advice on Social Media
A significant portion of Australians are tuning into social media for financial advice, with more than 30% seeking advice online.
Age Demographics
Age is a major factor in social media engagement for financial advice. Young Australians (18-24) are particularly active on social media, with 55.03% relying on platforms like TikTok and YouTube for financial insights. On the other hand, older Australians, especially those aged 55 and above, are less engaged, with only 10.50% seeking financial advice from social media.
Income Levels
Income significantly affects the likelihood of seeking financial advice from social media. Higher income earners ($200k+) are more inclined to use social media for financial advice, with 37.27% doing so. On the other hand, individuals earning between $30k and $44k are the least likely to seek advice from social media (16.82%).
State Differences
Geographical location also influences engagement with financial advice on social media. Queenslanders (QLD) lead in seeking online financial advice (30.59%), while South Australians (SA) are the least likely to use social media for financial advice(21.25%).
2.2 Preferred Social Media Platforms for Financial Advice
The platforms Australians choose for financial advice vary widely, reflecting personal preferences and demographic factors. YouTube emerges as the most popular platform overall (36.32%), likely due to its long term prominence in the social media landscape and its rich content variety and ability to provide engaging long-form explanatory content. This versatile content allows Youtube to cater to a wide range of audiences with varying needs.
Facebook (26.74%) and TikTok (26.43%) also are significantly used for financial advice, catering towards different user demographics and content consumption habits.
Age Demographics
Among younger Australians (18-24), TikTok (48.52%) and YouTube (40.83%) are the most used social media platforms, indicating a preference for short, engaging videos that offer quick tips and insights. For older demographics (55+), YouTube (24.50%) and Facebook (23.50%) are preferred.
Income Levels
Income levels also influence platform preferences. Higher income earners ($200k+) gravitate towards YouTube (37.27%) and TikTok (29.09%), likely due to their need for timely financial information. In contrast, lower income earners (under $30k) also favor YouTube (36.08%), but their engagement with TikTok is significantly lower (21.52%).
State Differences
YouTube remains the top platform across all states, particularly in Queensland (33.53%) and Western Australia (35.92%). This widespread preference indicates YouTube's broad appeal and effectiveness in delivering financial advice to diverse audiences.
2.3 Verification of Financial Advice
The extent to which Australians verify the financial advice they receive from social media varies significantly. Overall, 25.29% of respondents always check the legitimacy of such advice, indicating a cautious approach to integrating online advice into their financial decisions.
Age Demographics
There is a pronounced lack of verification among older individuals (55+), with over 28% of those aged 55+ rarely or never double-checking their information, compared to just 5.92% of those under 25. This is very interesting, given that older people are far less likely to use social media for financial advice overall - which indicates that on the rare occasions that they do, they are unlikely to verify what they’ve read or heard heard is real.
Income Levels
Income levels also impact verification behaviors. Higher income earners ($200k+) are more likely to verify advice (30.91% always check). Lower income earners (under $30k) are less likely to double check their (18.99%), possibly due to a lack of resources or confidence in their ability to discern credible information.
State Differences
Queenslanders are the most consistent in verifying financial advice, with more than 29% double checking their financial advice received every time as compared to Victorians who are less diligent (22.23%).
2.4 Following Finance Influencers by Region & Apply International Advice
Australians show a strong preference for following finance influencers from Australia (50.41%), indicating a high level of trust in local advisors who understand the specific financial landscape and regulations of the country. Influencers from the USA are also popular (29.00%) among Australians.
Age Demographics
Younger Australians (18-24) are particularly likely to follow influencers from both Australia (71.01%) and the USA (34.91%). This engagement with international content creators suggests that younger people are more open to diverse perspectives and actively seek out a wide range of financial advice. However, older Australians (55+), typically only watch local influencers (35.00%), which likely indicates a preference for advice that is directly applicable to their specific financial context.
This is further reinforced by the fact that younger Australians (18-24) are also the most likely to apply overseas advice (40.24%) to their own financial situation. And again, older Australians (55+) are the least likely (6.00%), possibly due to a preference for advice that is closely aligned with their local financial environment
Income Levels
Higher income earners ($200k+) follow both Australian influencers (52.55%) and those from the USA (26.36%). Contrastingly, lower income earners (under $30k) also prefer Australian influencers (53.80%), but their engagement with international influencers is lower (19.62%).
Income levels also significantly influence the application of overseas advice. Higher income earners ($200k+) are more likely to apply overseas advice (28.18%), likely given a need to keep up with international investments. Lower income earners (under $30k) are far less likely (15.89%) to apply overseas advice to their personal situation.
State Differences
New South Wales (NSW) has the highest percentage following local influencers (56.38%), while Western Australia (WA) has significant engagement with USA influencers (23.30%).
Queenslanders are the most likely to apply overseas advice to their financial situation (24.71%), while South Australians are the least likely (21.25%).
2.5 Understanding and Verification of Financial Advisors
Awareness of what a financial advisor is remains high among Australians, with 89.97% knowing what a financial advisor does. However, the ability to verify the registration of a financial advisor is less widespread, with 57.82% knowing how to check if an advisor is registered.
Age Demographics
Younger Australians (18-24) have the lowest awareness of financial advisors (86.98%), which may reflect their reliance on digital sources of advice over traditional financial services. Older Australians (55+) show the highest awareness (95.00%), likely due to their longer experience with traditional financial advisory services.
Income Levels
Higher income earners ($200k+) have the highest awareness of financial advisors (96.36%), while those earning under $30k have the lowest (89.24%). This disparity likely reflects differences in access to financial education and advisory services.
State Differences
Geographically, South Australians have the highest awareness of financial advisors (96.25%), while Western Australians have the lowest (93.20%).
Why is this the case?
As highlighted in the introduction of this report, those who use social media for financial advice are more likely to pay their bills late and struggle with anxiety related to managing their finances and meeting payment obligations.
There are several reasons why people who get their financial advice from social media might struggle more with their finances.
One reason is the type of advice circulating online. Popular yet questionable practices like physical cash stuffing, drop shipping, investing in AirBnBs that you don’t own, declaring bankruptcy, and applying for numerous credit cards with high annual fees can lead to financial pitfalls.
Another factor is the high cost of professional financial advice. Many people find it cheaper to turn to social media influencers for advice rather than paying the high fees for a licensed professional. The average cost of hiring a financial advisor or accountant is between $3,500 to $7,000 depending on whether the customer opts for general or comprehensive advice, which many on the average salary of $90,000 cannot afford.
Additionally, public trust in homegrown content is often higher than in traditional institutions. A 2022 study found that a significant number of Gen Zers consult TikTok for health advice and turn to YouTube before seeking medical advice from doctors. This trust extends to financial advice, making social media a popular yet risky source.
Knowledge Gaps & Awareness
A significant portion of Australians do not double-check the financial advice they receive from social media. Only 25.29% of respondents always check the legitimacy of such advice, however as established earlier in this report - this varies across demographics.
While some may double check the legitimacy of the advice they receive, there is also a gap in awareness where consumers may still apply “real” online advice to themselves without deep consideration of their personal circumstances. For instance, many influencers recommend credit cards with high reward points, but fail to mention the high annual fees and interest rates, leading to financial strain for their followers.
This lack of critical evaluation might explain why those who primarily get their financial advice from social media are twice as likely to use credit cards, personal loans, and BNPL services, and borrow money from family and friends to pay bills compared to the average Australian.
Online Advice Can Be Dodgy
The reliability of online financial advice is a significant concern. A 2024 study by WallStreetZen found that 63% of stock-related videos on TikTok were misleading, and 95% did not include disclaimers about investment risks. Furthermore, recent data indicates that 58% of people who get their financial advice from TikTok are less confident in their financial management abilities compared to 12 months ago.
Many social media influencers participate in paid promotional schemes, which can lead to biased and potentially harmful advice. Specific examples of bad advice include:
Physical cash stuffing: Keeping large amounts of cash on hand is not advisable as it doesn't earn interest and can be lost or stolen. A lot of cash stuffing videos on tik tok also promote an “aesthetic” that uses flaunting physical money to disguise questionable budgeting.
Drop shipping: This business model often comes with legal issues, low profit margins, high competition, and no control over the supply chain.
Investing in AirBnBs on properties you don’t own: Subletting properties can lead to legal issues and liabilities.
Declaring bankruptcy: While it may be recommended overseas, it doesn't absolve all debts in Australia.
Investing in virtual currencies: Crypto investments are highly speculative and can fluctuate significantly.
Below is a word cloud capturing the respondents' qualitative answers around the best piece of advice they received from social media.
Recommendations
Despite the questionable advice, there are credible sources and useful financial tips on social media. General advice on saving, investing, and budgeting can be beneficial, and there are licensed financial advisors sharing their expertise online.
Some recommended TikTok pages for financial advice include:
Tash Invests
Invest with Queenie
Broke Girl Wealth
James Wrigley
Specific good advice examples:
Regulatory Measures
Finally, as established earlier - while close to 90% of Australians know what a financial advisor is, only 57.82% know how to check if an advisor is registered. This knowledge is particularly low among those under 34, with less than 40% aware of how to verify a financial advisor's registration, compared to 56% of those aged 55+.
To verify if your favorite fin-fluencers are licensed, you can use the ASIC financial advisor registry by inputting their name, ABN, or suburb. This ensures that you are receiving legitimate advice relevant to Australia.
ASIC has been tightening its regulations on online creators. As of 2022, ASIC broadened its scope for what is considered a financial service, warning influencers that earning money through affiliate links to online brokers may count as providing a financial service.
If you encounter questionable advice online, it’s crucial to double-check the information before acting on it.
