Seeking advice on social media: should advisers respond or join in?

What's going on?

Nature abhors a vacuum.

The ‘advice gap’ in the UK is estimated to be made up of over 12 million people, with only 9% of adults actively receiving financial advice from an adviser.[1]

While 72% of people believe that getting financial advice is important, 35% of people are ‘not quite sure’ where they should start looking for it.[2]

Instead, people are seeking out information from other sources.

44% of Gen Z believe they can source good financial advice on social media, and over a fifth of investors aged 18-34 are taking investment advice from Instagram.[3]

Why does it matter?

People are actively seeking out financial advice; they’re just not using traditional channels.

And that’s leading to worse outcomes and exposing people to foreseeable harm.

58% of under-40s who have invested in high-risk investment products, say their decision was based on hype on social media and the news.[4]

With the FCA reconsidering the advice/guidance boundary, new opportunities to meaningfully engage with a wider audience are emerging for advisers willing to put themselves out there and capture this hungry audience – offering people the help they want at the time they need it.[5]

What can we do?

• Fish where the fish are. Reddit and YouTube, TikTok, Instagram and X are the top five platforms where the under-40s look for financial advice.[6] Rethink your channel strategy. Show up.
• Make yourselves accessible. The average content produced by investors ranks closer in comprehension to academic papers than to financial media.[7] Reconsider your tone of voice. Be conversational.
• Dramatise the value of quality. 44% of people who do not use a financial adviser, have said that it is due to a lack of understanding of what an adviser can offer them.[8] Reprioritise your messaging. Prove your worth.

For more from our 2024 Signals Report, read the full piece here. Or if you’d like to discuss the impact of these signals on your business contact us at hello@teamspirit.co.uk.

1. https://www.boringmoney.co.uk/learn/articles/do-you-need-a-financial-adviser/
2. https://www.covermagazine.co.uk/news/4126415/people-value-financial-advice-struggle-gain-access
3. https://www.moneymarketing.co.uk/opinion/its-time-for-advisers-to-get-social/
4. https://www.fca.org.uk/publication/guidance-consultation/gc23-2.pdf
5. https://professionalparaplanner.co.uk/advice-guidance-boundary-may-lead-to-regulatory-restructuring/
6. https://www.fool.com/the-ascent/personal-finance/articles/these-are-the-5-most-popular-social-media-platforms-for-financial-advice-should-you-trust-them/
7. https://portfolio-adviser.com/fund-management-articles-written-mostly-by-men-and-more-complex-than-a-level-exams/
8. https://www.covermagazine.co.uk/news/4120637/lack-understanding-main-reason-seeking-adviser