A new study
by Barclays reveals that 51% of the UK investors who use social media for
financial guidance are potentially exposing themselves to risk by failing to
consistently verify the credibility of financial influencers (or “finfluencers”)
and their content.

Half of Social Media
Investors Neglect Due Diligence, Barclays Study Finds

The survey,
which polled over 2,000 UK adults, found that nearly a quarter of Britons now
turn to social media, messaging apps, and online forums for investment guidance.
This trend is particularly pronounced among younger generations, with 37% of
Gen Z respondents seeking financial advice through these channels.

“Our
research shows that a quarter of people don’t know how or where to start
investing, with growing numbers turning to social media for this support,” said Clare
Francis, Director of Savings and Investments at Barclays Smart Investor. “These
platforms clearly play a positive role in making investment information more
relatable, but they also come with risks.”

The study
reveals a generational divide in platform preferences. TikTok emerges as the
top choice for Gen Z investors, while Facebook leads among Millennials and Gen
X. This shift towards digital platforms for financial advice underscores the
evolving landscape of investment guidance.

“It can be
difficult to work out which accounts are trustworthy and run by experienced
financial professionals, so it’s worrying to see that half don’t carry out
regular checks on finfluencers,” Francis added. “This puts them at risk of
making unsuitable investment decisions or even falling victim to investment
scams.”

The Barclays
study shows similar results to previous reports on the same issue. Back in
April, CMC Markets revealed that 1
in 3 retail traders trust a finluencer more than their family or friends.

Scams and “advice gap”

Barclays’
research also sheds light
on the prevalence of investment scams on social media. According to the
bank’s data, over half of such scams occur on these platforms. This alarming
statistic has led to calls for enhanced security measures, with 73% of
investors expressing a desire for social media companies to implement
verification systems for financial content creators.

“As
more people turn to social media for investment guidance, there is a clear
demand for platforms to improve transparency around finfluencers’ credentials,”
commented Sasha Wiggins, CEO at Barclays Private Bank and Wealth Management. “This
is crucial in tackling the threat of investment scams and preventing people
from acting on unsuitable advice.”

A similar
study in Germany showed that
over 50% of young investors bought trading products through influencer
links, trusting social media personas more than professional advisers.

The
findings come amid ongoing discussions about the “advice gap” in the
UK financial sector—the disparity between the demand for investment advice
and its affordability. Barclays has proposed several policy changes to address
this issue, including regulatory adjustments to allow banks to provide more
personalized investment recommendations.