Smart Tips to Evaluate Financial Advice on Social Media

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Scroll Smart: How to Spot Trustworthy Financial Advice on Social Media

Cartoon pig character with a determined expression holding a rolled financial document, surrounded by social media like icons, hearts, and floating coins on a bright orange background. The image represents the intersection of finance, social media influence, and financial education.
crypto trends financial advice financial literacy scam prevention
Jan 31, 2025

Can You Trust Financial Advice on Social Media?

In a world where a 15-second TikTok can teach you to budget or invest, how do you know if the advice you're following will set you up for success—or send you spiraling into financial chaos?

 

Social media has transformed how Australians consume financial information. Platforms like TikTok, Instagram, and YouTube are buzzing with creators sharing tips on saving, investing, and even retiring early. While this flood of information is making financial concepts more accessible, it also raises a big question: how do you separate legitimate advice from a well-disguised sales pitch?

 

As financial literacy becomes a hot topic, it’s crucial to critically evaluate the advice you’re consuming—especially when it concerns your hard-earned money. In this article, we’ll explore the pros and cons of social media finance, highlight emerging trends, and provide actionable tips to help you make smarter financial decisions.

 

Why Financial Advice on Social Media Is So Popular

Social media isn’t just about dancing videos anymore—it’s a hub for bite-sized knowledge, with hashtags like #MoneyTok and #FinanceTips garnering billions of views. These platforms have democratized financial information, often presenting complex topics in an easy-to-understand format.

 

Why People Love It:

  • Relatability: Creators use real-life examples and everyday language.

  • Bite-Sized Learning: Content is concise, making it easy to absorb key points.

  • Tailored Content: Topics range from managing student loans to buying your first home, catering to diverse demographics.

 

However, popularity doesn’t equal credibility. Some creators lack qualifications, while others oversimplify or misrepresent concepts. With financial advice tightly regulated under Australian law, it’s vital to ensure that what you’re consuming complies with legal standards.

 

The Risk of Following the Wrong Advice

Not all advice is created equal. Misguided tips can lead to:

 

  • Poor Investment Decisions: Jumping on trends like cryptocurrency without understanding the risks.

  • Over-Reliance on Quick Fixes: Thinking a side hustle or budget hack is a cure-all.

  • Legal and Financial Consequences: Acting on advice that isn’t compliant with Australian financial laws.

 

Australia’s Legal Framework: Under the Corporations Act 2001, financial advice in Australia must be provided by a licensed financial adviser. Even general advice must clearly distinguish itself from personal advice. If someone on social media isn’t licensed, their guidance should be treated with caution.

 

Trending Financial Topics on Social Media

  • Side Hustle Success Stories: While inspiring, they often gloss over the time, costs, and risks involved.

  • Cash Stuffing & Visual Budgets: A fun way to save, but not always scalable for long-term financial growth.

  • Cryptocurrency FOMO: Heavily hyped but high-risk, particularly when promoted without proper disclaimers.

 

Pro Tip: Look for content that aligns with trusted Australian resources like ASIC’s MoneySmart for validated advice.

 

How to Evaluate Financial Advice on Social Media

Before acting on any financial tips, run it through these filters:

  • Check the Source: Are they qualified? Look for certifications like AFSL (Australian Financial Services Licence) or affiliations with accredited institutions.

  • Look for Disclosures: Paid promotions should be clearly disclosed (e.g., #Ad or #Sponsored).

  • Assess Their Tone: Legitimate advice acknowledges risks and nuances. Overly simplistic or overly confident advice is a red flag.

  • Cross-Verify Information: Confirm claims through reliable sources, such as APRA (Australian Prudential Regulation Authority) or your superannuation provider.

 

Protect Yourself From Financial Scams

  • Be Skeptical: If it sounds too good to be true—like guaranteed high returns—it probably is.

  • Verify Contacts: Always contact organisations using official websites, not numbers provided in messages.

  • Don’t Act in Haste: Scammers often use urgency to push you into bad decisions.

 

Australian Resources: Use tools like Scamwatch to identify and report suspicious activity.

 

Leveraging Social Media for Financial Literacy

Social media isn’t all bad—it’s a fantastic tool if you know how to use it wisely. Here’s how:

 

  • Follow Verified Experts: Look for licensed advisers or creators who collaborate with reputable organisations.

  • Use It as a Starting Point: Think of social media as an introduction, not the final word. Deep dive into trusted platforms like MoneySmart or consult a financial adviser for tailored advice.

  • Engage in Conversations: Join Australian communities discussing financial habits, like budgeting or superannuation tips.

 

Final Thoughts: Turn Social Media Knowledge Into Smart Financial Choices

Social media is changing the game for financial education, but it’s up to you to decide which advice is worth following. By staying critical, verifying credentials, and cross-referencing information, you can turn the noise into knowledge.

 

At Life Sumo, we believe in empowering Australians with tools and strategies for smarter financial choices. Need help getting started? Download our free Sumo Life Operating System Dashboard or book a free 15-minute consultation today.