Can you trust TikTok when it comes to money advice?

Emmy Dent might not seem like your stereotypical TikTok influencer. A mortgage adviser by day, her most popular posts are about credit scores. Her online tutorials have nothing to do with beauty hacks, but instead, how to get a loan if you’re self-employed, or how to find a solicitor. Yet her TikTok account is proving wildly popular, with tens of thousands of followers and hundreds of thousands of likes, and a steady stream of new Gen Z clients inspired to finally get some help with their finances.

“I have a lot of followers who have used us for their mortgages and protection, as well as followers we are working with to get ‘mortgage ready’,” says Emmy who posts regular, funny and engaging 60 second videos under the account @thatmortgageadvisor. “So many people say ‘why weren’t we taught this in school?’, ‘I’ve learnt so much watching your page’ that I do think it is going to really help a lot of the new generation.”

Emmy decided to start a TikTok page to show people that mortgage advisors are reliable and understandable. “Too many people are nervous to speak to financial advisors and I wanted to change that. I think it helps people because the videos are short and don’t use jargon. About 90 per cent of my followers are under 35.” TikTok, formerly known as somewhere to watch pugs skateboarding or postmen singing sea shanties, is fast becoming the place to go to learn a new practical life skill, too, including how to better manage your money.

The hashtag #personalfinance - a useful way to find the topics you want to learn about - has had an incredible 4.5billion views, #savemoney 1.5billion, not to mention the more controversial #stocktok (covering stocks and shares investment) at 1.5billion, and one of the most popular, #crypto, 4.9billion, where young people are flocking to find out how they too can earn thousands of pounds overnight through investing in Bitcoin (clue: it’s very unlikely, like winning big in Vegas).

During lockdown the appetite for personal finance advice, investment and cryptocurrency content has skyrocketed. Over half of young people say the coronavirus crisis has made them feel more anxious about money, according to The London Institute of Banking & Finance, and over 80 per cent say they want to learn more about money and finance in school.

Step up the thousands of often self-appointed FinTok experts trying to reach this new young audience in snappy, attention-grabbing ways, talking about complex topics from compound interest, to Lifetime ISAs, to how to use credit cards sensibly.

Some FinTok creators, such as Emmy, are well motivated: @finacielle for example talks to camera offering tips on everything from car finance to how to start a side hustle or takes people through how to save £10,000 a month.

@gabriel.nussbaum creates role play videos to explain topics like how much tax you pay, and how to avoid scams, while @investella focuses on how to invest slowly and steadily, with the occasional help from her labrador, including explaining diversification using dog breeds. Ella Foster, 22, started @investella to speak to other young people “because interest rates are so low and with inflation, by leaving money in a savings account its losing value. I want people to know their options”.

@getwokenotbroke is run by Holly, who works as an investment consultant but she posts advice on money topics that most affect young people, such as renting, or buy-now-pay-later schemes: “Understanding money is so important, particularly for younger generations who are living longer without generous pensions to fall back on,” she says. “Yet there’s a huge gap in financial education, and the information that does exist tends to be inaccessible or boring. TikTok allows me to reach a huge audience, sharing the stuff I’ve learnt about personal finance in an engaging way.”

The newest face to join the world of Financial TikTok is founder of Money Saving Expert Martin Lewis. He’s taken to the fast-growing social media app to offer financial advice aimed at 18-35-year-olds on everything from buying your first home to student loans. Martin’s first video has got over 3.5M views in under a month, and he tweeted after his first upload: “Wow. Posted my first video on Tiktok a few hours ago and it already has a million views. Not sure I'd quite realised the power of the platform before!”

Be warned, however: there are also thousands of “finfluencers” in it for the profit or fame, flogging products they don't understand, or risky investments unsuitable for your average cash-strapped member of Gen Z. Foster points out that wealth building takes time. If you’re told it can happen quickly, “it probably isn’t true,” she says.

In July, Tiktok banned the promotion of financial services products Link opens in a new window, including cryptocurrency and forex, following warnings that people who didn’t know what they were talking about, as well as plenty of scammers and grifters, were luring young people into losing money through dodgy or extremely risky money-making schemes. One of the things making it hard to know who to trust is TikTok’s algorithm. What you are shown in your “For You Feed” is not based on follower numbers or blue-tick credentials, but on your own browsing history, what kind of videos you engage with, and how long you watch them. That means kids in their bedroom, who decide they want to teach others how to trade, can become overnight investment stars.

Very few finfluencers have any credentials, and their advice is unregulated, which means you’re proceeding at your own risk by following it. And even if a TikTok creator is credible, is it really possible to capture everything you need to know about complex financial products or services in a video that lasts seconds? It’s something that disturbs many of those who work in the offline personal finance space.

Emilie Bellet, founder of the money network Vestpod, has launched a TikTok @vestpod but believes it’s important to be vigilant, and retain a healthy scepticism when scrolling. “Understanding money, and especially investing, takes time. There are things we simply can’t master just because we watched a short video. It’s tempting to follow ‘fail-proof’ and ‘get rich quick’ tips, but you need to be able to recognise when money advice is simply too good to be true. It’s also always worth checking the content creators’ background and credentials before you part with your hard-earned money based on their advice.”

Alexia de Broglie, co-founder of Your Juno Link opens in a new window, a financial education platform for women and non-binary people, agrees. “Anyone following FinTok influencers should be researching elsewhere before taking any action. The information is often too simplified because of the format, so anything acquired on TikTok should be treated as an entry point to go on and seek out credible financial information.”

In other words, take what you watch with a pinch of salt. If what you’re seeking is motivation to budget or pay down debt, savings hacks, or tips on how to spend less, then you’re not putting yourself in a risky position by taking on board what influencers have to offer. But when it comes to investing, or any discussion of alternative currencies such as bitcoin, be particularly wary.

“There are a lot of influencers that are spreading false information,” says Emmy. “My best piece of advice is to check anyone you are thinking about contacting [off the back of a TikTok video] is registered with the FCA, there is an easy register on its website Link opens in a new window where you can just do a quick search.”

Also, think about what is in it for the creator. If they appear to be making a lot of money from the “advice” they’re dishing out, then you might want to question who is really gaining the most from you following it.

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