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Won’t somebody please think of the children?
TikTok may not be the best place for young people to seek financial advice, and the problem appears to be getting worse. Researchers with Daytrading.com analyzed viral finance posts on the social media platform in September, evaluating them on accuracy, educational value, disclosure and oversimplification. Surprise … about 70% of the videos received an overall grade of C or lower. When researchers repeated the review in April, 80% of videos earned mediocre marks. “There was a big jump in the number of videos that don’t adequately explain risks,” said James Barra, head of content at Daytrading. “The videos are very good at telling people when and what to buy, but there’s very little about when to exit.”
Still, Barra believes advisors can help improve the information younger investors encounter online. By establishing a presence on platforms like TikTok, they can serve as credible voices amid a flood of questionable content. They can also consider building relationships with clients’ children, viewing those interactions as a long-term investment in future clients, he said.
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Doom Scrolling
The problem with social media is that the loudest voice often wins, not the most accurate one. Educational content can struggle to compete with flashy promises of quick riches. One highly rated video in the study encouraged viewers to avoid penny stocks and focus on low-cost ETFs, but posts like that are often overshadowed by more sensational claims. “A 30-second video that says, ‘Invest in this AI stock because you’ll make this much money,’ is far more engaging than a five-minute explainer weighing both the pros and cons,” Barra said.
Some of the more dubious videos encouraged market timing and speculative investing. In one example, a creator predicted a cryptocurrency would surge to a $1 billion market capitalization based on speculation that Barron Trump and Elon Musk might discuss it publicly. The post attracted more than 31,000 likes.
Sound the Alarms. Another concerning stat is that nearly one-third of videos featured creators with undisclosed relationships with brokerages, trading platforms or educational services. “The most alarming thing is how easy it is to come across content that’s quite misleading,” Barra said.
The report also found:
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Many posts promoted leveraged trading and “guaranteed wealth” narratives while downplaying risks.
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Crypto-related content consistently generated higher engagement than less exciting topics such as bonds or retirement planning.
“Parents probably don’t realize that within a few clicks, young people can get in contact with people saying, ‘buy this crypto’ or ‘buy this stock,’ and that becomes the first thing they learn about investing and finance,” he said.
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