It is estimated that there about 4.5 to 5 billion active social media (i.e. Facebook, Instagram, TikTok and X to name a few) users in the world. The global population itself is now over 8 billion meaning over half of the world’s population has some form of a social media account. So, me being 1 of those few billion users scrolling through my Instagram, I’ve been coming across many suggested posts and pages (to follow) asking me questions such as, ‘Do you want to get out of your 9-5 job and make more?’ or ‘Work only 1-2 hours and earn 3x times more?’ or ‘Emotionless trading is the way forward’. The questions that always pops up in my head is ‘how can a person believe this will actually work?’ and ‘how is this regulated?’
Scams, regulations and content freedom – my experience:
Last summer, I received a Facebook link from a friend stating that ‘This Morning’ (on ITV), had to go off air because they were interviewing the author of the money saving expert website who was endorsing a new investment application ‘Quantum Ai’. As the interview started, the presenter had invested £50 and made almost £900 in 5 mins, and she was called to go off air and ITV apparently went off air for 5 mins.
Firstly, I thought this would have blown up on Instagram and would have been trending on ‘X’. I did my own search and found that in 30 seconds that this was a complete scam. The same company made a fake post using the owner of ‘X’ to promote their scam on ‘X’. My first question after this was, ‘How could such posts be allowed?’. But the problem here is how can each post, comment, content, video or reel be monitored considering more than half of the world are on such platforms? Wouldn’t this be a monumental task that has to be carried out each second or minute?
There is a perception that social media space is seen as a place where people have the freedom to create without restrictions. However, just as we have seen posts on the X platform falling foul of the libel laws we are now starting to see the financial services regulators get tougher on social media influencers. The Financial Service Market Act (2000) states that you must be an authorised person to provide financial advice. There have been cases recently where social media influencers have promoted complicated financial instruments not meant for mass market sale. This has resulted in a number of prosecutions currently going through the UK courts. There is only so much the regulator can do however so are there other ways we can address the problem.
Financial Intelligence Education
Does financial information sound boring? Social media is a place where people may not want to know exactly what not to do with their money. It could be seen as a happy place and anything outside of that space, people potentially would not be interested. So how do we protect people from incorrect financial advice and scams like the one mentioned above?
I’m going to borrow something from two books that I read recently, ‘Rich Dad, Poor Dad’ and ‘How The Rich Are Getting Richer?’ by Robert T. Kiyosaki. He finished both books by emphasising on ‘Financial Intelligence Education’, this is something that personally stuck with me, educate yourself. Since, whenever possible I’ve been trying to read books, articles, following blogs and of course having conversations with colleagues, friends and family about stocks, investments and of course the economy. And I have now written this blog. Obviously, everyone has different commitments and life can take over so what can we do?
Conclusion
The rise of costs doesn’t help and it’s normal to be curious about something that can bring a bit more income. However, I believe that it is virtually impossible to stop people posting and creating content about investment schemes, workarounds, scenarios and online financial coaches. Maybe the way forward is to ask, ‘how do we protect ourselves and others?’ Is it something that organisations, schools and banks could do to educate people. Usually when we sign up to something, get a leaflet, SMS or an e-mail from the bank, do we fully read the terms and conditions?
Here are a few recommendations:
- See if the investors are financially regulated.
- Organisations could make everyone attend a session on basic finances and what to look out for on a yearly basis.
- Companies could get involved locally with charities that specifically focus on financial wellbeing, education and managing money such as the ‘RedStart Charity’, ‘The Money Charity’ or the ‘Just Finance Foundation’.
- Virtual interactive 1-hour sessions could be compulsory for everyone signing up to investment portfolios, schemes and even bank accounts. Sounds boring, but hopefully it can create awareness.
Finally, pause and ask yourself, ‘is it that easy?’. Because my grandad and dad always said to me ‘nobody gives anything for free, especially money’.
