Where do 80% of young Americans get financial advice?

Nearly eight in 10 young adults have gotten financial advice from social media, Forbes Advisor found in a new survey. But just how reliable is this information? Experts disagree.

“There are a few gurus out there that can speak to general advice, but the reality is that each individual is different and what applies to one person may not apply to another,” said Jake Falcon, founder and CEO of Falcon Wealth Advisors. “A big con from getting advice on social media is that the person offering the advice may not be qualified to do so.”

However, online advice can be helpful if users consider the source, said Brian Walsh, manager of financial planning at SoFi.

“Social media tends to get a bad reputation when it comes to personal finances, but that is extremely unfair,” he said. “’Fortunately, good examples of sound financial advice on social media outweigh the bad. You just have to know where to look and how to distinguish between the two.”

Related: Millennials say they need $1.8M to retire (Gen Z, $1.4M) – both want more 401(k) options

One thing everyone can agree on is the growing popularity of turning to social media for advice. According to the survey:

• 79% of Americans representing the millennial or Gen Z age groups have gotten financial advice from social media.
• Three in four believe financial content on social media has made it less taboo to talk about money.
• 62% feel empowered by their access to financial information on social media.
• Reddit and YouTube are the most trusted platforms for financial advice.
• Half have made money as a direct result of financial advice they received on social media.
• Three-fourths report that social media has improved their financial literacy.
• Two-thirds believe they are more financially literate than previous generations, and the same percentage believes they’re more financially literate than their parents were at the same age.

Outside of social media, those surveyed get financial advice primarily from family (35%) and internet searches (33%). The use of financial advisors is comparatively rare (11%).

Cara Macksoud, managing director and CEO of the personal finance platform Money Habitudes, said younger people may be more inclined to follow advice dispensed by people from their own generation than from other generations. But that generational advice comes with a dose of caution.

“Gen Zers idolize influencers, many of whom are being paid to promote financial advice, such as advice about crypto,” she said. ‘What these influencers are leaving out is the risks and understanding that are needed to manage those types of investments.”

Walsh recommends LinkedIn and Twitter as the best social media sources for reliable insights about personal finance.

“Both of these platforms allow people to provide context, which is extremely valuable when it comes to personal finances,” he said. “Other platforms tend to offer much shorter content that often lacks context. I stress context, because there are not many absolutes in personal finance.”

One potential problem is that just 31% of millennials and Gen Zers regularly check the experience and qualifications of people who provide financial advice on social media.

‘Unfortunately, anyone can post anything online without consequence, including bad or inaccurate advice about money management,” said Rick Nott, a senior wealth advisor at LourdMurray. “I’m a regulated advisor. There are some things that I just can’t say, and for good reason. You don’t get that filtering online.”

Carl Holubowich, a principal at Armstrong Fleming & Moore, warns that young people should be on the lookout for social media-driven financial scams. In a 2022 study, the Federal Trade Commission noted that among 2021 fraud reports citing the victim’s age, Americans ages 20 to 29 represented 41% of fraud losses, compared with 18% for people 70 to 79.

In 2021, more than 95,000 people reported about $770 million in losses to fraud initiated on social media platforms, according to the FTC. Those losses accounted for about one-fourth of all reported fraud losses in 2021. Those numbers prompted the FTC to brand social media as a “gold mine for scammers.”

Falcon recommends depending on social media only for general education about financial matters and then seeking in-depth advice from a certified financial professional. Perhaps the best advice is that although social media can be a helpful tool, take any recommendations with a grain of salt.

“Be skeptical,” Nott said. “Don’t take everything you read at face value. Instead, approach the material with an analytical eye and ask yourself if this makes sense or if something doesn’t add