Financial Advisors Face New Challenges on TikTok

Financial advisors are facing a new competitor in TikTok. Investment professionals are concerned about the growing influence that financial influencers have over young people, particularly through platforms like TikTok and YouTube. A survey in 2022 revealed that Gen Z is more likely to seek financial advice from social media than a financial advisor. This trend is largely due to advisors using the same old pitch for decades, insisting that the markets are risky and complicated, and that they can help navigate them to obtain the best returns possible. However, it has become increasingly clear that advisors often cannot get their clients the best returns, and low-fee index funds may be a better investment choice. Despite this, advisors’ pitches remained largely unchallenged until now. Gen Z is uninterested in following in the footsteps of their predecessors and are instead seeking new, innovative ways to invest their money. Social media has become a hub for this kind of investment advice, but it is important to exercise caution and avoid influencers offering bad advice. Despite the rise of social media influencers, it is still important to seek financial advice from qualified professionals.