Over half of users who follow financial advice on social media lose money, TSB claims

New research from TSB reveals that over half (55%) of individuals who acted on financial advice found on social media platforms subsequently lost money.

Based on a survey of nearly 2,000 social media users, the findings highlight a growing concern about unregulated financial content online.

TSB’s study indicates a pervasive presence of financial advice on social media, with over four-fifths (83%) of respondents encountering such content even when not actively searching for it.

Younger demographics are particularly susceptible; 42% of 16-24-year-olds and 37% of 25-34-year-olds reported using social media for financial advice in the past year.

Trust in this content is also high among younger users, with 70% of 25-34-year-olds and 62% of 16-24-year-olds trusting the information they see, significantly higher than the 27% among over 55s.

Alarmingly, 31% of all respondents have acted on social media financial advice, with 25-34-year-olds being the most likely age group to do so (73%). The consequences are often negative, as 55% of those who acted on advice reported financial losses.

The prevalence of investment “opportunities” on social media is also a major concern, seen by nine out of ten respondents. While over two-fifths (43%) would consider investing based on these posts, 42% admitted they did not know how to verify the credibility of online content.

TSB’s internal data reinforces these risks, showing that over two-thirds (67%) of push payment investment fraud cases originate from social media platforms, accounting for 71% of all investment fraud losses. The average loss per case is £3,706. Facebook and WhatsApp were identified as platforms leading to the biggest losses.

Surina Somal, TSB’s Director of Everyday Banking, cautions:

“While there could be useful sources of financial advice on social media platforms; there are also pitfalls through incorrect information and unregulated investments that could derail your finances.”

She urged consumers to verify content to make safe and informed financial choices. The research underscores the need for greater awareness and caution when engaging with financial advice on social media.