Social media, AI increasingly shape financial advice, but experts warn consumers to be cautious

Social media and artificial intelligence are playing a growing role in how people receive financial guidance, though experts are urging consumers to exercise caution.

A recent study conducted by NerdWallet revealed that nearly 50% of Gen Z consumers and 33% of millennials utilize platforms like Instagram and TikTok for financial direction.

The research also indicated that more than eight out of 10 consumers purchase items at least once annually based on influencer suggestions, with nearly half reporting they make such purchases on a monthly basis.

Experts suggest that consumers can utilize social media more effectively by prioritizing accounts that emphasize saving rather than spending. They recommend rec

Consumers are also encouraged to research the background of those providing advice.

“Sometimes when you’re scrolling through social media, not everyone is an accredited financial advisor or even has a background in finance,” Kimberly Palmer of NerdWallet said. “So, you wanna make sure you understand who is giving you this advice, if they’re being paid to recommend certain products. It’s really important to understand those potential conflicts of interest.”

When assessing financial tips found online, individuals should verify the creator’s professional credentials and history.

AI tools can also assist users in determining whether an individual possesses formal training or experience in financial management.

As AI becomes more prevalent, it can be useful for answering general inquiries, but it should be utilized with discretion.

“Well, asking AI for financial advice can be a really helpful starting point, especially if you have some general questions about how to budget or understanding different financial products, but what you want to be careful of is entering too much of your own personal information,” said Palmer.

Palmer advises against uploading sensitive documents, such as tax returns or other files containing personal data, to AI platforms.

She further suggests obtaining a second opinion from a trusted financial professional.

Another movement gaining traction online is “de-influencing,” where content creators highlight products they feel are overhyped and urge followers to avoid unnecessary spending.

Proponents argue that this trend may help mitigate some of the excessive consumption often driven by social media endorsements.