Home Personal Finance Financial advisors concerned about Gen Z using TikTok for advice

Financial advisors concerned about Gen Z using TikTok for advice

Financial advisors concerned about Gen Z using TikTok for advice

Hi there! Dan DeFrancesco in NYC, and it’s best to let grandma know about the risk of sending checks in the mail for your next birthday.

Today we have stories about James Gorman’s succession plans at Morgan Stanley, why the dispute between some partners and David Solomon at Goldman Sachs is still very real, and how you can change the way you think about training.

But first I’m going to tell you how to absolutely CRUSH the market.

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1. Swipe up to become a millionaire.

The impact of artificial intelligence on Wall Street worries many people, but some financial advisers fear a much more sinister adversary.

A Gen Zer with a ring light.

At a recent conference in Dublin, investment professionals were concerned about the growing power financial influencers have over young people, Insider’s Lindsay Dodgson writes.

“What we don’t want is for them to get their financial information on TikTok,” said an executive. “That exploded. I find that really frightening.”

Financial advisers are right to be concerned. A 2022 study found that Gen Z are more likely to seek financial advice from TikTok (34%) and YouTube (33%) than from a financial advisor (24%).

And honestly, who can blame them?

For generations, advisors have come along with the same old tone: the markets are complicated and risky. Trust us to help you navigate them and get the best return possible.

However, the truth is that they often cannot give you the best returns. In fact, you’re often better off putting your money into a low-fee index fund than handing your money over to an advisor. (This is not financial advice!)

Yet that pitch went largely unchallenged for many years. But Gen Z is a generation built to circumvent the norm. Time and time again they have shown no interest in following in the footsteps of their predecessors simply because that is the way things have always been done. Couple that with their obsessive consumption of social media, and you begin to understand why financial advisors have never had a fighting chance.

Of course, that’s not to say that this trend is a good thing. I have often poked fun at people who take financial advice from social media. There is no shortage of influencers – especially in crypto – giving bad advice. My general rule of thumb is that the more emojis used to describe investment strategy, the faster you should run in the opposite direction.

More on why advisors are concerned about young people turning to TikTok for help with their finances.

In other news:

Kelly Wells. Kelly Wells

2. Some Clues on Morgan Stanley’s James Gorman Exit Plans. The bank’s long-serving CEO offered clarity on when he planned to step down, including a list of things he would like to finalize before handing over the reins. Here’s what we know about the timing of succession at Morgan Stanley.

3. Magic mushrooms and surfing are the key to recovering from blowing up your hedge fund. Kyle Davies and Su Zhu, the founders of crypto-focused fund Three Arrows Capital, have been busy after their company collapsed last year. From spending time in Bali to attending a Formula 1 event, here’s how Davies and Zhu live the high life.

4. A boutique investment bank just launched to help startups sell their businesses. Brian and Lisa Sugar, founders of digital publisher PopSugar, founded Avid Capital Advisors to help consumer brands and software developers who want to sell themselves to larger companies. View all details.

5. Some partners of Goldman Sachs and CEO David Solomon can’t seem to get on the same rhythm. A new report from The Wall Street Journal details how tensions remain high on both sides, while the hustle and bustle from Solomon’s DJ side doesn’t help his case. More here.

6. Here’s how much you could save by moving to Miami. If you’re still considering moving to South Beach, we’ve got a breakdown of the taxes and living expenses you’ll get when moving from New York, San Francisco, and Chicago. Here’s the breakdown.

7. And if you really want to save on your next move… Check out these 15 smaller markets where the average down payment for a starter home won’t set you back more than $50,000. Have fun house hunting.

8. Let’s just stick a pin in here and come back tomorrow. So-called workplace jargon has somehow got younger generations thinking. Read this and then we can hit the basics.

9. A drink a day keeps the doctor away. Turns out, a little booze every night can help with your stress and even reduce your risk of a heart attack, according to a new study. But not everyone is sold.

10. Changing the way you think about going to the gym can do wonders. A fitness influencer explains how adding 60 seconds to her workout improved her attitude towards exercise. More about that here.

Curated by Dan DeFrancesco in New York. Feedback or tips? Email ddefrancesco@insider.com, tweet @dandefrancesco or connect on LinkedIn. Edited by Jeffrey Cane (tweet @jeffrey_cane) in New York and Nathan Rennolds (tweet @ncrennolds) in London.

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