First Merchants Bank - Click, like, and ignore: One third of young Americans seeking financial advice from unregulated celebrities and online influencers

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Feb 20, 2024, 11:00 ET

MUNCIE, Ind., Feb. 20, 2024 /PRNewswire/ -- New research from First Merchants Bank has revealed that almost a third (31%) of Americans aged 18-24 have a preference to take advice on financial issues from celebrities and influencers via social media channels.

Platforms such as Twitter (X), Instagram and TikTok are increasingly being used by younger generations for information. While both the internet and social media can be a hub of valuable and accessible resources, there is a risk of this content becoming a replacement for regulated information from trusted banks and independent financial advisors.

Taking financial advice from unregulated celebrity influencers may not be the wisest choice, and there are several reasons to exercise caution in doing so, according to First Merchants Bank's Director of Omni and Digital Banking, Jeremy Tankovich:

Lack of expertise – While influencers create engaging content that viewers enjoy, they may not have formal education or expertise in finance. Financial matters can be complex, and advice from individuals without proper qualifications may lack the depth and accuracy needed for sound decision-making.
Potential conflicts of interest – Celebrities and influencers often endorse products or services as part of their brand partnerships. This may lead to biased recommendations that serve the interests of their sponsors' interests rather than the financial well-being of their audience.
Risk of misinformation – There's a lot of misinformation out there. Financial information shared on social media platforms may lack proper vetting and fact-checking. Influencers might unintentionally spread misinformation, contributing to financial decisions that could negatively affect you.
Varied financial backgrounds - Celebrities or influencers have unique financial situations that may not apply to the public. With the creator industry valued at $250 billion, some of the biggest social media influencers bring in large annual incomes. Following their advice without considering your individual circumstances could lead to inappropriate financial decisions.
Limited accountability - Unlike regulated financial professionals, influencers may not be held accountable for the outcomes of their advice. No regulatory body oversees their recommendations, which can leave followers vulnerable to poor guidance.
Emphasis on entertainment over accuracy - Social media platforms prioritize entertainment and engagement, looking to grow their channel. Financial advice from celebrities or influencers may be geared towards capturing attention rather than providing comprehensive and accurate guidance.