One in five younger investors now turn to TikTok for investment ‘ideas’ — according to research from Hargreaves Lansdown.
This research shows more people are increasingly turning to social media for investment help, advice and inspiration — with Reddit being the most popular platform for investment among younger investors.
In the past year the use of TikTok for investment ideas have jumped from 12 per cent to 20 per cent among the 18 to 24 age group. At the same time there has been a decline in the number of people seeking information from websites run by traditional financial companies — although the research said these remained popular among the older 55 plus age group.
There has also been an increase in the number of middle aged investors turning to social media for investment ideas.
Back in 2021, only 5 per cent of investors aged 35-54 said Reddit was an influence This figure has now risen to 10 per cent. Meanwhile, the number of 35–54-year-olds using Instagram has risen from 4 per cent in 2021 to 10 per cent, although the use of TikTok appears to have dipped back among this age group according to HL.
This trend presents a challenge for many workplace pension providers, with younger members increasingly seeking information and guidance on a range of investment issues from these social media platforms.
Hargreaves Lansdown head of money and markets Susannah Streeter says: “The collision between social media and financial markets has been one of the most dramatic trends emerging over the past few years and it shows little sign of easing.
“Swiping through posts to get ideas about investing is increasingly a favourite pastime among many younger investors with TikTok and Reddit becoming more influential. The use of traditional company financial sites is on the wane among this age group,
“In 2021, 43% of 18–34-year-olds surveyed would get their money knowledge from websites of financial companies – now it’s just 29%. But the use of Reddit for investment ideas has jumped from 17% to 26% and Tik Tok from 12% to 20% over this period.”
However against this background there have been an increased number of younger investors seeking information from newspapers, with the figure almost doubling from 12 per ent in 2021 to 23 per cent this year.
She said that social media is prompting a more diverse range of investors to start putting their money into financial markets. But she adds: “What is concerning is that it’s often on posts or in chat rooms on social media where speculation surrounding hot stocks and more risky investments runs rife.”
When the data is split by gender, significantly more men than women say they have their own investment ideas. Only 7 per cent of female investors say they do this, while 19 per cent of male investors say they come up with ideas themselves. Streeter says: “This could be argued as fresh evidence of the tendency of men to be over-confident and more impulsive, on average, compared to women. Other research has shown that women focus less on short-term gains and more on long-term goals, trade less frequently and typically outperform men when it comes to investment returns.”
The post More young investors look to TikTok for investment advice appeared first on Corporate Adviser.
