Some Kiwis turning to TikTok for financial advice

Lucy Anderson
Source: 1News

Some young Kiwis say they are turning to social media app TikTok for financial advice.

Social Media Apps Logotypes Printed on a Cubes stock photo.

High school student Hannah Corbett told 1News she used TikTok for money saving tips when she got her first part-time job.

"I wanted to make sure I was saving but also allowed myself spending money."

Corbett says there are lots of TikTok accounts that give financial advice but she doesn't think a lot of people take that information in.

She said she uses TikTok and Instagram but would be less likely to Google saving pointers.

Another high school student, Dotti Baker, says she doesn't intentionally search for financial advice videos but they do show up on her feed.

"TikTok is very good at getting people's attention compared to Google as they are short quick videos so you don’t get bored," Baker said.

But she says she's weary of some content on the app and speaks to her parents if she feels unsure.

"I think when it comes to trusting what you read on TikTok you just have to take everything with a grain of salt and never rely on it for information."

Twenty-one-year-old Otago University student Katie Thompson also told 1News she uses the popular app for research on shares.

“I was going through a real phase of trying to get my head around shares and it’s [TikTok] really the only media outlet that simplified it so I could comprehend what they were saying, everything else was just a bit confusing.”

Thompson said she finds TikTok to be more efficient compared to search engines like Google.

“There's just so much information on Google, and also I’m a visual learner so I understand it better on TikTok and it’s so much quicker.

“Also when I find a few videos I’m after, there’s like an algorithm so it kind of shows you the same relevant videos again.”

Thompson said the information on shares and finance usually seems legitimate because she’s seen it from several different users on the app.

Chartered accountant Luke Kemeys has a following of 16,000 on TikTok where he gives financial advice in 30-second long videos.

Kemeys told 1News he gets a lot of engagement on the app, with one video about unclaimed money getting more than half a million views.

He said the idea behind his videos is to help people, rather than attract business for himself. “I think people are learning a lot which is cool.”

Kemeys said there’s no way for TikTok users to know his content is legitimate unless they dig deeper and research him.

“I think people are pretty good these days at digging and saying is this person full of shit or are they not.”

“There’s a lot of confusing information out there for people but I feel like young people are quite good at what could be a scam and what might not be,” he said.

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Kemey said a lot of his audience are younger people who are wanting a “kick up the ass” to get their finances in order.

Financial journalist Frances Cook has more than 80,000 followers on TikTok and says 60% of her audience is also younger people aged 20-40.

Cook posts videos about mortgages, savings tips, credit card “traps” and investing.

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She says her audience is predominantly female which she assumes is because she’s relatable.

“It kind of opens up the conversation when you see someone else talking about it who looks like you and sounds like you then I think it makes it a bit easier to feel like the conversation is for you, which I think is good.”

She told 1News one of the reasons she made a TikTok account was because she was seeing a lot of “dicey” personal finance content.

“I just thought I’m going to start putting out some of the stuff from my work and then at least there’ll be some good information out there to counteract that [bad information].”

Cook said some people might be dubious when they first see her videos but she thinks that’s a good thing.

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“If people aren’t just taking things at face value I think that’s great and that’s why I make sure I use my real name, I don’t use a nickname or anything on my TikTok and I say on there I’m a financial journalist.

“So hopefully if people are a bit like “who is this chick”, they can just google me and they’ll know I’m actually someone who knows what I’m talking about, not just someone who’s just putting stuff on the internet.”

Social media users should adopt a buyer beware approach when seeking financial advice online, Cook says.

“Just because someone has a big following, doesn’t mean they know what they’re talking about.”

She also said people should check what qualifications people have before taking their advice on board.

In June last year the Financial Markets Authority (FMA) released guidelines for "Finfluencers" (financial influencers).

The FMA said the guidelines were formulated after some concerns social media influencers were giving non-regulated financial advice to large audiences.

Some of the guidelines suggested by the FMA say it's fine to talk about financial matters online, as long as it's kept general.

New laws about financial advice also took effect last year, which say people must hold a Financial Advice Provider licence when giving regulated financial advice to everyday consumers. Those misrepresenting themselves as financial advisers are liable for a penalty up to $200,000.

A spokesperson for FMA told 1News the guidelines were created because "financial influencers" were becoming more and more prevalent online.

"We're very conscious of how many people there are online and what their influences are.

"We wanted to make it as clear as possible for people that there's a role for sharing information and talking about financial matters but there's also really important line to know is there that you shouldn't cross in terms of providing what would be thought of as regulated financial advice."

Cook said she spoke with the FMA when it was putting the guidelines together, who she says were “really keen” to get it right.

“I think it’s really good that the FMA is keeping an eye on this, but they obviously can’t be everywhere.”