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.