Whether it's posts on Instagram, Facebook or Twitter, or videos on TikTok and YouTube, you’ve probably seen investment advice and opportunities from self-proclaimed ‘financial experts’ and social media influencers.
But how can you know if you can trust an investment recommendation you spot on social media?
It would be unwise to invest any money based on a recommendation made on a social media platform. Most people giving investing advice on these platforms have no significant financial experience or training and care should be taken when considering their advice.
For example, if an investment tip is broadcast to many people at once on social media, it’s likely you will not be the first to act. This means you could end up making the investment when the price is already extremely high.
Scams are another risk of using social media to get investing advice.
Scammers often fake profiles of well-known celebrities or the websites of legitimate firms to steal your personal information or get you to invest in get rich quick schemes. According to Action Fraud over £145m was lost to cryptocurrency fraud in 2021 alone.
Find out more about making smart investment decisions on the FCA’s InvestSmart website