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Back when dinosaurs roamed the Earth (the ’90s and early 2000s), good money advice was difficult to come by. Your choices were pretty much either to pay for financial advice, work it out yourself, or rely on the content in various self-help books or esteemed local newspapers.
It’s part of the reason why books such as Scott Pape’s The Barefoot Investor or Money guru Noel Whittaker’s Making Money Made Simple became so monumentally popular, as they provided clear, easy to understand financial tips to a population that was desperate for them.
Then the internet came along, which has generally been regarded as a huge mistake. Suddenly, everyone could get financial advice, and – more importantly – everyone could give financial advice, and people with vested interests got a massive platform to spruik their dubious investments.
What’s the problem?
Over the years this has led to hundreds of thousands of Australians losing billions of dollars to various investment scams ($174 million in 2025 alone, according to Scamwatch). And, according to a recent survey by corporate regulator ASIC, Gen Z are also at risk, despite being considered a more “tech-savvy” generation.
Nearly two-thirds of Gen Z use social media for financial information, and more than half of them say they trust the advice they find there. From that, nearly a third say they buy and sell investments – usually crypto – based on advice from social media “finfluencers”.
What you can do about it
This has set off alarm bells at ASIC HQ, which has warned Gen Z investors to “sense check” their online money advice, concerned it could be leading to riskier behaviours. So if you are getting money advice online, what red flags should you look out for?
- Are they real? Not to get immediately existential with you, but we are unfortunately in an era where it has become very difficult to determine if the people on your social media feeds are actual, breathing human beings. AI has become good enough to fool the average person, and will only get better, so ensuring your would-be advisor is real is critical. This is especially pertinent when it comes to anything seemingly being promoted by a celebrity, says Sarah Megginson, personal finance expert at Finder. “Deepfake videos are so convincing, so you need to exercise extreme caution before clicking on any links that seem to come from celebrities or high-profile finance experts,” she says. If you’re unsure, Megginson suggests a quick Google of the celebrity’s name and “investment scam” should reveal whether they are legit or not. (For example, there are multiple articles highlighting scams featuring Fortescue CEO Andrew Forrest.) If they’re not a celebrity, but you’re still unsure, check them out on LinkedIn or just do a general Google – if there’s not much about them online, or what you find looks suspect, it’s best to steer clear.
- Are they applying pressure? The art of the hard sell has been around for decades, perfected in the ’80s and ’90s by Wolf of Wall Street-esque salesmen convincing you to invest in this crappy company now before this whole thing skyrockets. Unsurprisingly, these same tactics still work decades later, but this time it’s young men on TikTok convincing people to buy whatever crappy crypto coin before it goes “to the moon”. This is another red flag to look out for, according to ASIC commissioner Alan Kirkland. “That influencing behaviour that generates hype and urgency on social media is really intricately entwined with the sorts of behaviours that we see around crypto, and it’s a key cause of some of the risks,” he says. “Yes, some people will make money when the value is on the way up, but a lot of people will lose money when it plummets.”
- Are they promoting one single product? One of the pillars of modern financial advice is diversification – not putting all your eggs in one basket, but rather spreading your money over a range of different options. It’s for this reason that exchange-traded funds are so popular for investors of all ages, with some $330 billion invested in them in Australia alone. So it should be immediately concerning when someone is spruiking one specific investment (barring commodities such as gold), and Kirkland warns it’s often the case that they’re being paid to promote it. “Making investment choices is very much about picking something that’s right for your individual circumstances, which involves understanding you as a person, understanding your needs and aspirations, and your financial situation,” he says. “So if you see somebody online that’s pushing a particular investment, that’s an immediate red flag.”
- Are they teaching you something, or selling you something? Finally, it’s important to delineate between people online who are providing general advice (for example, much of the advice you might read in this newsletter), and people who promise to teach you something once you sign up for their three-week course. “Absolutely no shade to those who monetise their content and advice, especially if they’re offering good value products and services that can help you improve your financial situation,” Megginson says “But a lot of online advice isn’t neutral, it’s designed to create fear and scarcity, so you’re incentivised to buy what they’re selling.” If a video or article ends in a call to sign up for something or to “buy this course this to learn more”, you should be suspicious. “Good financial guidance doesn’t rely on pressure tactics or urgency,” Megginson says.
Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.
Dominic Powell is the Money Editor for the Sydney Morning Herald and The Age.Connect via X or email.