16 per cent of Australia’s Gen Z population "completely trust" artificial intelligence (AI) platforms with their financial decisions, while 56 per cent and 52 per cent believe on financial information on social media and from finfluencers, respectively.
A Survey to Examine the Investment Trends of the Young Generation
Australia’s Moneysmart surveyed 1,127 Australians aged 18 to 28 to examine the role of modern technology and social media in their financial decision-making.
The local financial regulator, the Australian Securities and Investments Commission (ASIC), further found that 63 per cent of respondents use social media for financial information and guidance, while 30 per cent use YouTube and 18 per cent use AI platforms.
However, 60 per cent still use formal or professional sources, while about 50 per cent turn to family and friends.
Read more: How AI Guides Smart Spending and Investing
The Aussie regulator's concern appears to be the dominance of social media in financial decision-making among young people. It is now urging them to ‘sense check’ the information they see online.
“While Gen Z values credibility when seeking financial advice, what they see on social media is usually shaped by algorithms that are designed to drive clicks and views rather than provide accurate information,” said ASIC Commissioner Alan Kirkland.
“Financial information on social media and accessed through AI tools can be incomplete, promotional, or misleading. Relying on it alone increases the risk of making a decision you may later regret.”
- $583 Million Back in Australians' Pockets: ASIC Just Had Its Most Brutal Enforcement Year Ever
- Sarah Court Named ASIC's New Chair as Women Take Control of Australia's Economic Watchdogs
- Former GAIN Capital and Invast Director Pleads Guilty in $181,000 Fraud Case
Crypto Bets Are a Concern
The regulator appears more concerned about the rising short-term investment in cryptocurrencies by this age group.
The survey found that 23 per cent, or almost a quarter, of respondents own cryptocurrencies. Among them, 66 per cent take short-term, speculative bets. Additionally, 29 per cent trade based on social media and influencer content or recommendations.
Moreover, 24 per cent of Gen Z crypto investors try to invest in new “coins”, while 15 per cent invest in them as a ‘bit of a punt’.
You may also like: eToro CEO - “We’re in a Strong Position to Double Down on Crypto,” Adds Prediction Markets
Social media advertisements have encouraged around 72 per cent of Aussie crypto investors in this age group to invest in this asset class in the past 12 months. Interestingly, 41 per cent were approached by someone offering to help them invest in crypto.
“Short-term or speculative trading based on what’s popular online carries real risks, particularly in volatile markets like crypto,” Kirkland added.
While the influence of social media on the financial habits of the younger generation is now clearly visible, ASIC has also had disputes with some local finfluencers. Meanwhile, the UAE remains the only country to mandate licensing for all finfluencers who give financial advice on social media platforms.
