Use of Tiktok and Reddit for financial advice soars among Gen Z and Millennial investors

The use of Tiktok and Reddit for investment ideas from young investors has skyrocketed, as Gen Z and Millennials increasingly turn to social media for financial advice.

The number of 18-34 year old investors who get money knowledge from Reddit and Tiktok has jumped dramatically just in the last three years, from 17 per cent to 26 per cent for Reddit, and from 12 per cent to 20 per cent for Tiktok.

In contrast, 43 per cent of 18-34 year olds said in 2021 that they got investment information from websites of financial companies; that figure has now cratered to 29 per cent, according to data from Hargreaves Lansdown.

“In many ways it is encouraging that social media is prompting a more diverse range of investors to start putting their money into financial markets,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

“However, what is concerning is that it’s often on posts or in chat rooms on social media where speculation surrounding hot stocks and more risky investments runs rife.”

Despite the rise of social media, another surging source of financial knowledge is newspapers, with the number of young investors using them as a source almost doubling from 12 per cent to 23 per cent.

The rise in social media among investors also isn’t just confined to young people. Activity among investors aged 35-54 saw similar spikes since 2021, with those using Reddit and Instagram doubling to 10 per cent, although the use of Tiktok dipped.

This trend hasn’t made its way to the over 55s yet though, as only one per cent report using social media to get financial information. Instead, financial websites, financial advisers, and newspapers remain the top pick among the older generations.

Looking at gender, significantly more men than women said they come up with their own investment ideas, with only seven per cent of female investors saying they do this, compared to 19 per cent of men.

“This could be argued as fresh evidence of the tendency of men to be over-confident and more impulsive, on average, compared to women,” explained Streeter.

“Other research has shown that women focus less on short-term gains and more on long-term goals, trade less frequently and typically outperform men when it comes to investment returns.”