Between 2018 and 2022, TikTok attracted an average of 340 million new active members each year. The social media giant has become one of the biggest video-sharing platforms in the world, catering for every niche pursuit and interest.
Whether you’re looking for reading inspiration or tips on flower arranging, TikTok will have channels you can follow. So, it’s perhaps no surprise that there has been a rise in content providers – often called “finfluencers” – sharing money tips and advice.
Indeed, recent research from Deloitte revealed that more young people are turning to social media than their bank for financial guidance.
While there are some professionals providing genuinely useful tips on TikTok and other social media, it’s also been dubbed “the Wild West” when it comes to reliable financial advice.
So, read on to discover five reasons why you should think twice before taking mortgage advice from TikTok, and why working with a professional can pay dividends.
1. The person may not be regulated or accredited
One of the key issues to consider is that many online influencers will not be authorised and regulated to provide any form of financial advice.
In the UK, individuals and firms must be registered with the Financial Conduct Authority (FCA) to provide regulated advice. This regulation ensures that mortgage brokers are suitably qualified to help you with your borrowing needs and protects you from unlicensed individuals who may have a very different agenda.
It’s unlikely that finfluencers will have taken the relevant exams and obtained the qualifications needed to provide regulated advice. So, if you act on advice you view on social media from an individual who is not authorised and regulated by the FCA, you do so in the knowledge that they might not have the necessary knowledge and expertise to back up their assertions.
2. The information could be misleading
If individuals sharing mortgage advice on TikTok and other social media channels are not authorised and regulated, the information they provide may not be accurate.
If you’re making important decisions with your mortgage – likely to be the biggest financial commitment you ever make – you need to do so in the knowledge that any suggestion that you read or hear is accurate.
While the FCA has rules that regulated individuals and firms must follow when promoting financial information, the vast social media landscape means it is not realistically possible for every post to be checked.
This became such an issue in 2021 for TikTok that the platform banned all investment promotions. And, in the US, the Securities and Exchange Commission has fined high-profile stars such as Kim Kardashian and Logan Paul for misleading financial promotions.
While there may be factually correct information on TikTok, the most sensible course of action is to instead seek advice from genuine professionals.
3. It’s not personalised advice
By the law of averages, some of the financial tips and advice being shared on social media will be correct. However, even if it is accurate, it does not mean that whatever an influencer is suggesting is appropriate for your unique circumstances.
Decisions around your mortgage should be bespoke to you, factoring in elements such as your income, outgoings, wider financial position, and affordability.
If you simply follow mortgage advice on social media, you could end up making choices that are not tailored to you as an individual. This could have a serious and negative impact on your future.
4. The person may be receiving financial incentives to promote certain content
When finfluencers and social media channels share videos online, they may be financially incentivised to promote certain content.
Many influencers may promote sponsored content from which they receive a payment when you follow their affiliate links, rather than offering useful, constructive advice.
Individuals using this strategy will not be interested in what is best for you and your wealth, unlike a regulated mortgage broker who is impartial. A regulated professional will always give you the right advice, not the option that will help them and their earnings.
5. It could be a scam
A recent report in FTAdviser revealed that, in 2022, UK consumers lost £75 million to financial scams on social media. And, the average loss on TikTok was an eye-watering £138,472 – higher than all the other platforms.
Criminals are coming up with increasingly sophisticated fraud, with many hosting content and linking to websites that look entirely genuine. They could then either steal your personal data, or financial details, and leave you out of pocket.
When viewing financial content on TikTok, always consider that it could be an elaborate scam. Working with a regulated professional gives you the peace of mind that your finances – and data – are safe.
Get in touch
If you’re seeking professional, bespoke advice from an FCA-regulated broker, Altura can help.
To find out how, email info@alturafin.com or call us on +44 (0) 20 3411 0079.
Please note
Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.
