TikTok warning for South Africans

Financial advice has been taking over social media sites. According to social media manager SocialChamp, the #FinTok hashtag on TikTok has over 124,000 posts and over 4.7 billion views.

Younger consumers, in particular, find value in this content. According to Sprout Social, around seven in ten people have found inspiration this way.

At 71% and 68% respectively, most Gen Z and millennials said social media has positively impacted their financial decisions.

Wanita Isaacs, Head of Key Accounts at Momentum, said the ability of finfluencers, including #FinTok content creators, to break down financial concepts into plain language and communicate them in an entertaining and relatable way drives audience numbers.

She explained that for many people, #FinTok and similar platforms allow them to learn about personal finance from role models who look like them and have apparently similar values and lifestyles.

Trends such as cash stuffing, loud budgeting, and underconsumption have made budget tips relatable while combating the shame consumers often feel about their spending and saving habits.

At the same time, Isaacs said, users of these platforms have the responsibility to soundboard financial advice with an accredited financial adviser to make the right decisions.

While social media influencers may seem relatable and authentic, influencers are rarely qualified in financial planning.

In addition, their followers often don’t have the complete picture of influencers’ business decisions, as they see only carefully curated and edited videos designed to persuade.

Isaacs said another consideration is geographic location. The biggest #FinTok communities are in the United Kingdom and the United States, so their content may not be relevant to South Africans.

Generic advice

Financial content for social media must be generic to find an audience. However, Isaacs pointed out that generic advice is ineffective when it comes to financial journeys, even if all followers are pursuing the same goal.

“A concept like financial freedom looks different for everyone because their unique circumstances come into play – no two financial journeys are alike”, she said.

“A financial goal, whether short, medium, or long-term, can best be achieved with expert, tailored support.” This means that generic advice, meant to reach as many people as possible, is not always the best advice.

“However, bespoke and tailored advice is only possible when working with a financial adviser qualified to give advice and who understands local conditions.”

Isaacs also urged consumers to remember that anyone can post on #FinTok, but not everyone is qualified. On the other hand, financial advisers are trained and regulated professionals who are held to ethical and legal standards.

Financial advisers don’t just focus on one area, like budgeting or investing – they look at a client’s entire financial picture.

From retirement planning and insurance to estate planning and debt management, an adviser can help navigate all aspects of someone’s financial life in an integrated way.

“This comprehensive approach ensures you’re not making decisions in silos or overlooking important risks,” she said.

Get the most out of #FinTok

This does not mean that financial advice on social media has no place, though. According to Isaacs, the role of #FinTok and other similar platforms in helping to diversify and democratise personal finance is an important one to create awareness of the importance of financial planning.

Their content can also help start or deepen conversations with a financial adviser, even if it is just to get an expert opinion on the relevance of social media financial advice.

Isaacs recommended that South Africans save the videos or posts they enjoy and share it with their financial adviser.

“By sharing social media content that helps you articulate your experience and perspective, your adviser will have more context and will also be better equipped to advise you.”

She explained that consumers can also follow or connect with their adviser on social media to easily and quickly seek advice.

“As with all financial content, critical thinking is essential,” Isaacs added. “Watch out for scammers and evaluate whether the strategies shared are right for you. Ask your adviser for a second opinion.”

She stressed that tailored advice will always be more impactful because it takes personal circumstances into account.

“Engaging with a financial adviser allows you to take what you see on social media, discuss it, and apply the relevant elements to your own life, at your own pace,” she said.

“It can also prevent you from making expensive mistakes and help you, with the expert advice from your financial adviser, stay on track to achieve your unique financial goals, also in your own time.”

Issued on Daily Investor by Kirsten Minnaar | https://dailyinvestor.com/technology/96693/tiktok-warning-for-south-africans/