Australia's financial regulator has raised fresh concerns about how young Australians approach money decisions. A survey of gen Z (18 to 28-year-olds) released by the Australian Securities and Investments Commission (ASIC) found 56 per cent of respondents somewhat or completely trust financial information on social media. The finding points to a troubling gap between where young people seek guidance and where they should.
The underlying data presents a more alarming picture. Nearly two out of three, 63 per cent, said they had logged on to social media platforms to seek financial advice. While gen Z value credibility when seeking financial advice, the information they see most often is shaped by algorithms that are designed to drive clicks and views rather than providing accurate information. This is not a minor distinction. Algorithm-driven content rewards engagement over truth, and that creates obvious incentives for sensationalism.
The rise of so-called "finfluencers" has amplified this trend. More than half of those surveyed, 52 per cent, said they trusted "finfluencers" (financial influencers) and 64 per cent put their faith in AI platforms. Most of these influencers are not registered financial advisers. This means they operate outside regulatory frameworks designed to protect consumers. The fact that a person has a large social media following does not qualify them to advise others on investments.
Artificial intelligence compounds the problem in ways worth examining closely. 30% use YouTube and 18% use AI platforms for financial information. These tools often lack transparency about their sources, the confidence levels in their outputs, or whether they understand the individual circumstances of the person using them. Regulatory bodies globally are still grappling with how to oversee AI-generated financial guidance. Australia's regulator is right to watch this space carefully.
Cryptocurrency ownership reveals the practical dangers of this misplaced trust. Almost one in four members of gen Z own cryptocurrency at 23 per cent, and of these individuals, 66 per cent take a short-term speculative approach to at least some of their crypto investment. Even more concerning: nearly a third, 29 per cent, said they trade based on social media and influencer content or recommendations.
This behaviour pattern exposes a deeper problem. Cryptocurrency is volatile. Its price movements are often driven by sentiment rather than underlying value. Young people making trading decisions on this basis face real losses. The financial watchdog said that strategy set unrealistic expectations about returns, price volatility and the realities of long-term investing.
There is a legitimate counterargument here worth acknowledging. Young people deserve access to information about investing. Restrictions on who can speak about finance would impair legitimate education and community debate. The real question is not whether people should share financial ideas online, but whether unqualified individuals should be profiting from advice that carries substantial consequences for their followers.
The encouraging part of the ASIC survey sits in the background data. The study found gen Z also had a strong appetite for reputable and trustworthy financial content, with 60 per cent reporting they used formal or professional sources. Young Australians are not uniformly naive. Many recognise the value of qualified guidance. The problem is finding it.
ASIC reminded those in that cohort wanting to invest wisely to access free, reliable and independent guidance through the government's Moneysmart website. For young people sorting through the noise, this is a solid starting point. But the broader issue remains: responsible financial decision-making requires effort in an environment where irresponsible guidance is optimised for viral spread.