Just like nearly every other topic in the world, investing has made its way onto social media. Influencers share their own portfolios, tell you how they made their first £100,000, or their most recent stock picks.
While some of this can be helpful information, it’s a part of social media that is fraught with scams and unreliable information. And because of how social media algorithms work, this more extreme content can be pushed towards the top.
Successful investors are typically those that stay in the market for an extended period of time, spread their assets across lots of different investments and proceed with caution. Unfortunately, this is not the most alluring formula to watch, so instead, more extreme strategies tend to go viral on social media. Some of these videos are simply scams, but others, while technically legitimate, are extremely high risk, and lead to many people losing large sums.
According to a study by Which?, £75 million is lost each year to investment fraud on social media.
If you like getting investment content through this format, it can still be a good thing. But it’s important to be curious about who is speaking to you, and their motives. Here’s a few checks to do before finding your favourite finfluencer.
Are they qualified?
If you want to receive financial advice by someone who is regulated by the UK’s Financial Conduct Authority, meaning real consequences for them in terms of the information they share, you will need to look for accounts run by financial advisers. Advisers are the people that are qualified to give advice, and if someone claims they are an adviser, you can double check in this handy register.
One of the perks to financial advice is that it can be personalised to your situation. But an adviser that is posting content on social media is speaking to a broader audience. So, take any of what they say with a grain of salt, and check that it applies to your financial situation.
A popular term flying around social media now is a financial or money ‘coach’. This is someone that informs people about investing but doesn’t have regulatory backing. This title doesn’t require any formal qualifications. It doesn’t mean this person doesn’t have financial knowledge, but they don’t have that same legal backing and shouldn’t be offering advice, only sharing information.
Demystifying sponsorships
Influencers often make their living from sponsorships. In some cases, this is a skincare product or supplement. In the financial world, it might be telling their followers to use a certain investing platform or a type of cryptocurrency. Be extremely cautious before following their recommendation. These influencers will be earning their commission whether you make money or not, but you could be left in a much worse spot than them.
Before investing in a new type of asset, or using a new platform, do your own due diligence. You can check Trustpilot reviews, other official financial sites, or FCA registers to make sure you're investing in something which is properly monitored. By choosing to invest through companies that are FCA regulated, you should benefit from the protection offered by the Financial Services Compensation Scheme of between £12,000 and £85,000 if the company were to go under. Although remember this doesn’t cover investment losses.
Read more about FSCS investor protection
Too good to be true? It probably is
Investing is never a guarantee. People who attempt to tell you otherwise, perhaps by saying they can ensure you’ll get double your money, are likely part of a scam. This should be an immediate red flag.
Unfortunately, there’s no investment that’s an automatic route to fabulous wealth, and anyone claiming otherwise likely has ulterior motives. Instead, looking for finfluencers who offer balanced perspectives, and recognise the risk of the market as well as the reward are more likely to be a reliable source.
Some of these social media sites will have links to click directly through to the service. It’s best practice to search for the company yourself after checking its legitimacy to ensure that you are going to a real site, instead of a website set up to mirror a real one.
Popular people in financial services can also be hacked or have deep fake versions of themselves created using artificial intelligence. So, if you’re getting direct messages, or suddenly getting tips that sound out of character, it could be false representation.
There is a wealth of knowledge available through social media, but it takes careful sifting. Sticking to people you can verify, and sense checking information with trusted sources in your own life can help you avoid scammers. If you’ve spotted a scam, you can help protect others by reporting it.
Hannah Williford: Content Writer
Hannah joined AJ Bell in 2025 as an investment writer. She was previously a journalist at Portfolio Adviser Magazine, reporting on multi-asset, fixed income and equity funds, as well as macroeconomic impacts and regulatory changes...
