Key Takeaways
- 36% of Americans now prefer social media over traditional financial advisers for money management insights, particularly among younger demographics.
- 55% of individuals who acted on social media-based financial advice experienced financial losses, highlighting the risks of unverified information.
- 71% of next-generation high-net-worth investors favour digital-first financial services, signalling a shift in future wealth management models.
- The rise of ‘finfluencers’ aligns with growing fintech adoption but poses regulatory and accuracy challenges.
- Traditional advisory firms risk losing market share unless they adopt hybrid or digital-integrated models quickly.
In an era where digital platforms dominate daily life, a striking shift is underway in how Americans source financial guidance: recent surveys indicate that 36% now favour social media over traditional financial advisers. This trend, driven by accessibility and perceived relevance, underscores broader disruptions in the wealth management industry, potentially reshaping investor behaviour and exposing vulnerabilities in personal finance strategies.
The Rise of Digital Influence in Financial Decision-Making
The pivot towards social media for financial advice reflects deeper generational divides and technological advancements. Data from a Gallup poll conducted in April 2025 reveals that 42% of American adults under 30 rely on platforms like TikTok and Instagram for insights into budgeting, investing, and retirement planning. This contrasts sharply with older demographics, where trust in professional advisers remains higher, at around 60% for those over 50. The appeal lies in the immediacy and relatability of content from so-called ‘finfluencers’—individuals who blend entertainment with financial tips, often amassing millions of followers.
Yet, this democratisation comes with caveats. A study by the Philadelphia Federal Reserve, published in March 2025, highlights that while social media has democratised access to information, it frequently disseminates unverified advice. For instance, 55% of respondents who acted on tips from these platforms reported financial losses, according to a TSB survey from July 2025. Such figures illustrate the risks: misinformation can lead to impulsive decisions, like chasing viral stock trends without due diligence, potentially amplifying market volatility.
Generational Preferences and the Data Behind Them
Breaking down the numbers further, younger cohorts are leading this charge. A Forbes Advisor survey from 2024 found that nearly 80% of millennials and Gen Z have sought financial advice via social media, with 34% specifically turning to TikTok. This preference stems from a desire for bite-sized, engaging content that traditional advisers often lack. In contrast, only 24% of Gen Z consult certified professionals, per Vericast data from 2023, updated in recent analyses to show minimal change.
Analysts at Capgemini, in their 2025 wealth management report, note that 71% of next-generation high-net-worth individuals prefer digital-first services, including mobile apps and social channels. This shift is not merely anecdotal; it correlates with broader fintech adoption. For example, robo-advisers, which blend algorithmic advice with user-friendly interfaces, have seen assets under management surge by 15% annually, as per industry benchmarks from Gyan Consulting in 2023, with projections holding steady into 2025.
- Gen Z and Millennials: 79% influenced by online financial trends, according to a Spruce survey in May 2025.
- Risk Exposure: Over half of those acting on social media advice incur losses, per TSB findings.
- Traditional Decline: Willingness to pay for professional advice has dropped to 39% among non-advised investors, down from 54% in 2023, as reported in the Advice Report 2025.
Implications for Investors and the Industry
For investors, the allure of social media lies in its cost-effectiveness—free advice versus fees that can reach 1–2% of assets under management from traditional firms. However, this bargain often masks hidden perils. Bankrate’s analysis in March 2025 warns that self-proclaimed experts on platforms may push self-serving recommendations, such as affiliate-linked products or speculative investments, without regulatory oversight. In a darkly ironic twist, the same tools empowering retail investors could engineer their undoing, much like a gambler mistaking casino lights for a sure bet.
From an industry perspective, this trend signals existential threats to legacy wealth managers. Firms must adapt by integrating digital tools or risk obsolescence. Analyst forecasts from InvestmentNews in May 2025 suggest that wealth management revenues could face a 10–15% erosion over the next five years if traditional advisers fail to embrace hybrid models. Labelled models from Forbes Advisor project that by 2030, digital advice platforms could capture 25% of the market share currently held by human advisers, assuming current growth trajectories persist.
Sentiment among professional sources remains cautious. The National Association of Personal Financial Advisors (NAPFA) expressed concern in their 2025 survey, noting that 34% of millennials and Gen Z cite a lack of guidance as a barrier to retirement preparation, yet many bypass regulated channels. This “truly concerning” development, as termed by Gallup analysts, highlights the spread of misinformation by finfluencers, potentially leading to suboptimal financial outcomes.
Navigating the Risks: Data-Driven Strategies
To mitigate these dangers, investors should cross-verify social media insights against credible sources. For instance, comparing viral investment tips with historical performance data can reveal discrepancies. Consider the S&P 500’s average annual return of 10% over the past decade (as of 11 August 2025 data); many social-driven fads, like meme stocks, have underperformed this benchmark post-hype, with average drawdowns exceeding 30% in volatile periods.
| Source | Key Statistic | Date |
|---|---|---|
| Gallup Poll | 42% of under-30s use social media for advice | April 2025 |
| TSB Survey | 55% who followed social tips lost money | July 2025 |
| Capgemini Report | 71% next-gen prefer digital services | 2025 |
| Advice Report | 39% willing to pay for advice (down from 54%) | 2025 |
Ultimately, while 36% of Americans leaning towards social media marks a pivotal evolution, it demands vigilance. Traditional advisers, armed with fiduciary duties and comprehensive planning, retain an edge in complex scenarios like tax optimisation or estate planning. Yet, as digital natives ascend, the industry must innovate—perhaps through AI-enhanced social integrations—to bridge the gap. Investors ignoring this duality risk not just their portfolios, but the very foundations of informed decision-making in an increasingly noisy financial landscape.
References
- Bankrate. (2025, March). American adults trust social media for financial advice—why that’s a terrible idea. Retrieved from https://www.bankrate.com/investing/financial-advisors/american-adults-trust-social-media-for-financial-advice-why-thats-a-terrible-idea/
- Capgemini. (2025). Wealth Management Report 2025.
- Forbes Advisor. (2024). How to choose a financial advisor. Retrieved from https://www.forbes.com/advisor/investing/how-to-choose-a-financial-advisor/
- Gallup. (2025, April). Americans’ financial advice rooted in people. Retrieved from https://news.gallup.com/poll/660467/americans-financial-advice-rooted-people.aspx
- Gyan Consulting. (2023). Fintech trends and AUM benchmarks. Retrieved from https://x.com/Gyan_Consulting/status/1643592074518732801
- InvestmentNews. (2025, May). Social media is winning Gen Z’s wallets over financial advisors. Retrieved from https://www.investmentnews.com/ria-news/truly-concerning-social-media-is-winning-gen-zs-wallets-over-financial-advisors/260522
- Marketing Interactive. (2025). Study: 52% of people in SG and HK rely on social media for financial advice. Retrieved from https://www.marketing-interactive.com/study-52-of-people-in-sg-and-hk-rely-on-social-media-for-financial-advice
- NAPFA. (2025). Social media survey results. Retrieved from https://www.napfa.org/social-media-survey
- Philadelphia Federal Reserve. (2025, March). How Americans use social media for financial advice. Retrieved from https://www.philadelphiafed.org/consumer-finance/how-americans-use-social-media-for-financial-advice
- Spruce. (2025, May). Survey: Gen Z and Millennials’ financial habits. Retrieved from https://www.inc.com/annabel-burba/gen-z-trusts-social-media-for-financial-advice-more-than-any-other-generation/91189521
- TSB. (2025, July). Over half of those who acted on social media financial advice lost money. Retrieved from https://ffnews.com/newsarticle/fintech/over-half-of-those-who-have-acted-on-social-media-financial-advice-have-lost-money-tsb-finds/
- Vericast. (2023). Millennial and Gen Z preference report. Updated 2025.
- WHSV. (2025, June 30). Getting financial advice from social media—experts say be careful. Retrieved from https://whsv.com/2025/06/30/getting-financial-advice-social-media-experts-say-be-careful
- Business Today. (2025, August 7). Indians turn to social media over banks for financial advice. Retrieved from https://www.businesstoday.in/technology/news/story/indians-turn-to-social-media-over-banks-for-financial-advice-new-report-shows-488317-2025-08-07
- Money Marketing. (2025). Fewer consumers willing to pay for advice—study finds. Retrieved from https://moneymarketing.co.uk/news/fewer-consumers-willing-to-pay-for-advice-study-finds
- New York Times. (2025, January 25). Financial advice and social media influencers. Retrieved from https://www.nytimes.com/2025/01/25/business/financial-advice-social-media-influencers.html
