Like many of you, I suspect I’m addicted to social media. But my habit has evolved. It used to be each morning I’d wake up and, before checking my work email or even text messages, I’d scroll through pages and pages of Facebook, sharing short blurbs and photos with friends and family.
Today, it’s memes and short videos, largely produced by strangers. Now TikTok (and to a lesser extent Instagram) has become the dominant player in the short-format video space, and #FinTok has emerged as an influential subset of the platform.
A recent study by Credit Karma showed that 26% of millennials and 52% of Generation Z get their financial advice from TikTok. That’s scary.
The biggest challenge with these videos, and the reason our shortened attention spans have grown to love them, is their 60-second time limit. Many videos are just 15 seconds long! In an hour, you can easily surf 100-plus videos on a range of topics from DIY home improvement, to life hacks, to motivational speeches to, you guessed it, financial advice. These videos are served up in rapid succession, one after the other, and it just draws you in.
The problem is that much of the #FinTok or #StockTok advice dispensed on these videos is wrong or misleading, and there are not enough of us financial planners making enough noise in these spaces to drown out the bad advice.
Financial advisors have long been afraid to embrace social media for anything beyond networking and personal use for fear of violating compliance regulations. This fear has created a vacuum in the social media world where fly-by-night financial “experts” and influencers dominate sites like TikTok and Instagram. These videos are attention-grabbing, entertaining and memorable. Damage will definitely ensue.
How bad are the videos? Here are some that showed up in my feed in the past two weeks:
Not the whole story
Premise: Your bank is ripping you off. If you have $10,000 in the bank, you will earn $1 per year in interest. If you need a loan, they will charge you much more than $1. Therefore, if you put money in a bank, you have given them a loan where you get repaid negative 1%. Instead of being a fool and allowing a bank to pay your negative interest, you should instead put your money in whole life insurance and allow your money to compound at a much faster rate.
My take: First of all, it’s no secret that banks make money by lending out the cash you’ve placed in your savings and checking accounts. Second, the math doesn’t quite add up. Third, while I think whole life insurance is great in certain instances, people clearly shouldn’t use insurance in lieu of an emergency fund.
Not the whole truth
Premise: You are a fool for not using business credit that is not based on your own Social Security number and credit report. You should take a business loan for $45,000, then take $35,000 and invest it to earn a 15% rate of return. Use the other $10,000 to pay the loan payments. Therefore, you are using the bank’s money to pay the bank and to make a rate of return.
My take: First of all, do you even have a business? Second, business credit is nearly always tied to personal credit. Third, no, I’m not taking your Master Class!
Someone is going to jail
Premise: How to get a $75,000 business loan without your Social Security number. First, open an LLC. Then get a business address and business phone number. Then get an EIN, DUNS number and open a business bank account. Open vendor trade lines, a gas card and retail credit cards. Then apply for a business loan. Ta-da!
My take: I don’t think I’d look good in prison stripes.
Into the fray
As you can see from this random assortment of advice, there is a crisis brewing. TikTok has not created a compliance program that’s adequate to flag this content, and there is no industry watchdog policing this stuff because most of these promoters are not licensed in the first place.
What is the solution? It’s us. Licensed, seasoned and honest advisors to join the platforms to mitigate the damage being done. No clue how to do so, you say? Ignorance is no excuse! Here are a few pointers for how to engage on TikTok.
Create a page by visiting
Once you’re oriented, make some noise in the comments section. Be brave and call out the inaccuracies in a misleading video. Don’t be discouraged if you get drowned out or attacked. But don’t spend too much time in the comments — you may be battling a bot!
As for compliance concerns, take the time to familiarize yourself with your company’s rules and bone up on the
When you’ve mastered that, it’s time for the next step.
Make a TikTok video
First, get a feel for what works in the format. I’ve seen many inexperienced — and yes that often means older — TikTok novices still introducing themselves as the video ends, and they are cut off before getting to their point.
Ask a young person in your life for advice on how to get your point across using TikTok tropes. What songs should you use? What are the popular visual formats — like the one where you point to different corners of the screens and words appear. Or the ones in which you talk to cloned versions of yourself, but each looks a little different.
Include a way for people to contact you and learn more by placing a link to your website in your bio or creating a special landing page on your site for people to find you.
Create lots of content. Back in the day, you could write a quarterly newsletter to get your point across. If you want to be seen on TikTok, you will need to post multiple videos every few days.
Have some fun! These platforms are not meant to be Bloomberg or CNBC. If people are drawn to your personality and style first, they will soon be wowed by your knowledge.
You may think these TikTokkers and Instagrammers don’t have any money. But remember, millennials stand to inherit $30 trillion to $68 trillion in the coming years. Social media may just be an easy way to expand your network and your client base.
And despite what happens, you will be doing a great service to the world by adding your legitimate voice to a noisy crowd where the people with the loudest megaphones are often the ones with the worst advice.
