Social media: an idea originally born to connect us with friends and acquaintances via the internet. Today, social media has evolved into a source for financial advice and insights for so many of us. Whether it’s crypto community open spaces on ‘X’ (formerly Twitter) or TikTok influencers offering their followers tips on the best ‘side hustles’ and investment opportunities right now.

According to recent research, more than one-in-five (21%) of 18-34 year old’s now turn to Instagram for financial investment advice. Given these figures, how did we get here and why are young investors phasing out traditional finance when it comes to looking after their money?

Jeremy Baber, CEO of Lanistar comments: “Slowly but surely, social media has grown into an ever-present in our lives and is now impacting the way we approach our financial decisions. In particular, if you fall into either the Gen Z or Millennial generation brackets.

“Twenty years ago, the idea of securing a job via a social media platform would have been unheard of, but today it is common practice to place our trust into these platforms when it comes to important financial decisions like these. Financial opportunities on social media are not exclusively reserved for job hunters either - investment advice or personal finance influencers are in abundance across various platforms.

“What we can see from the increased trust being placed in social media when it comes to our finances is a shift away from traditional finance. When it comes to seeking financial advice, it has become increasingly difficult in recent years to access in-person advice following the closure of many high street bank branches.

“For younger users, accessing advice via social media feels natural compared to leaving home and having to seek out a local bank branch which potentially could be closed or busy during peak times.

“Our reliance on social media can be celebrated but at the same time, caution must also be advised. Following influencers and trend-setters can lead to overspending in some cases as desirable lifestyles and possessions are frequently on show as part of its attraction. Before engaging with influencers or financial advice online, it’s always advised to conduct your own research before engaging and to always have a clear budget plan in mind relative to your income.”

Today, social media platforms are inundated with financial discussions. Whether users engage with the advice or not, a recent survey found that 69% of social media users came across financial advice on their feed.

Baber concludes: “Regardless of which side of the fence you sit on, seeking financial advice has changed forever due to social media’s booming presence within our lives. Having the power to research tailored credit card deals, secure crypto offerings and so much more via a social media platform is a powerful tool. Users are no longer restricted to 9-5 Monday to Friday opening hours of high street bank branches – social media never closes.

“Sceptics will highlight the warnings on becoming overly reliant on this new form of talking about finance. But in truth, when it comes to financials, due diligence and research should always be the first step anybody makes – be that on social media or via traditional finance channels. Nowadays, we demand an instant flow of data and this also includes advice or opportunities concerning our money, social media is quickly becoming the perfect vehicle to facilitate these needs. In short, the way we approach and talk about money has evolved and it’s here to stay and it’s just a few taps of your phone screen away.”