In 2018, Kylie Jenner tweeted she was no longer using Snapchat. In less than 140 characters she’d managed to wipe US$1.3 billion off the company’s stock.

Just more proof of the immense power social media has over the products we buy and trends we follow.

And its influence is spreading further. Many people are now taking their financial cues from social channels such as TikTok and Instagram.

With posts as innocuous as ‘How to get a cheap pizza from Dominos’, stretching to how you can retire as a millionaire, the ‘finfluencers’ are drawing in new audiences, many of whom have probably never previously given investing a second thought.

Research from Skipton Building Society showed three out of five 18–34-year-olds believed the advice shared online was reliable. Older age groups were not as trusting.

So, would you put your finances in the hands of a social influencer?

Don’t invest in what you don’t understand

Finfluencers have become a hit because they can give a simple message in an engaging way.

Mark Tilbury, the self-styled ‘boomer’ millionaire CEO, for example, is one of the top TikTok finfluencers (he earns an estimated US$5,860 per post). His money hacks and tips on how to invest, save money and negotiate are condensed into videos lasting less than 20 seconds. Perfect for an audience with a short attention span, giving them the headlines quickly before they swipe to the next.

A lot of good can come from posts like these. They help guide people on how to use their cash more wisely and provide the basics to further your financial education.

But a short video isn’t enough to distil all the nuance and detail needed before you actually press ‘go’ on an investment. And this becomes a problem when you start delving into something really complex like cryptocurrency.

Another TikToker,using the hashtags #crypto and #makemoney, boasts “I made $3,000 in 24 hours”.

In 44 seconds, he’s detailed the crypto token that paid for his trip to Puerto Rico. But save for a caveat to “always do your own research guys,” there’s no space for the potential risk involved if everything goes wrong.

Is it trustworthy?

A crucial point about financial advice is regulation. The Financial Conduct Authority is responsible for regulating the conduct of around 50,000 financial services firms and financial markets in the UK.

This means that anything we as advisers tell our clients, or promote, has to be carefully balanced with reminders of the risks involved. The more complex the investment, the longer the list of things you can and can’t say.

The advice given on social media isn’t regulated, so finfluencers can say anything they like.

There is evidence of a crackdown. TikTok has banned promotion of some financial services products, including cryptocurrency. However, it’s still very easy to find accounts promoting these assets.

Another perennial problem is transparency. Is the influencer paid to endorse a particular type of investment? Earlier this year, Kim Kardashian was fined US$1.26 million by the US Securities and Exchange Commission for promoting a crypto asset on her Instagram account, including a link for her followers to purchase tokens. But she’d failed to declare she was paid for the promotion.

Whether it’s from a social media account – or the money pages in the Sunday Times for that matter – it’s important to remember there’s no such thing as free advice. Any tips you receive need to be clear, accountable, and let you know the risks involved. If something seems too much like a “sure thing” you need to be incredibly cautious.

Talk it over before you act

Even when you feel you’ve got all the information you need, it’s still a good idea to talk things over with an adviser before you forge ahead.

Last year, the UK regulator warned that while many investors claimed high confidence and knowledge, in reality, many still lacked awareness of the risks involved. But alarmingly, 78% of young investors still attributed investment decisions to ‘gut instinct’.

Following your nose like this can lead to trouble. Especially with the current market turmoil in mind, it can lead to panicked decisions which are more harmful in the long run. Seeking out higher returns from riskier sources or selling out of investments with a more proven track record.

Take the table below as an example. It shows what’s happened to the S&P 500 after severe market falls going back to the 1960s. In almost all cases, when the market has fallen 25% , it’s back in positive territory a year after. And on most occasions, five or 10 years later it has soared to even greater heights.

Speaking to an adviser will help you avoid some of the more common mistakes. We’ll help make sure your investments are diversified, and think in more depth about the long-term sustainability of your money by considering the impact of environmental, social and governance (ESG) factors.

The meteoric rise of finfluencers will hopefully lead to a new generation of more clued-up investors, but there’s no substitute for qualified, regulated financial advice.