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“ A young kid in North America can release a video talking about investing in options and it can suddenly go viral in the UK , in a very different financial market . It ’ s going to take time for regulators to catch up with that ”
to make those mistakes in the first place , actually , when people do make a mistake , I ’ m not sure it does put them off investing . For some people it will make them realise that they need to do it in a different way .”
Regulation and education So what ’ s the answer ? Tighter regulation of social media posts about investing ? The problem here is that it is such a fast-moving area and regulators move at a glacial pace . Sanlam Private Wealth ’ s Eleanor Ingilby suggests investment content , just like contentious posts about Covid and vaccines , should come with a warning label : “ I use social media – Reddit , Instagram and TikTok , to a certain extent – and something I ’ ve noticed recently on Instagram is that posts around Covid have a warning attached with a link to websites to give you further information . I wonder whether something similar to that could be put in place for posts that talk about investing .” TikTok says it removes content which promotes investment schemes with promises of high returns . But social media giants and financial watchdogs alike will need to decide how they handle the increasing influence of social media stars who have access to a global audience of young people and make huge amounts of money as influencers . “ A young kid in North America can release a video talking about investing in options and it can suddenly go viral in the UK , in a very different financial market . It ’ s going to take time for regulators to catch up with that ,” says Ingilby . Teaching financial literacy from a younger age is a key piece of the puzzle , she adds . Her firm is thinking about how to talk to younger clients and even go into schools to give children a more realistic picture about what investing is and educate them about risk . “ It ’ s fantastic that more people are engaging with the market , but I think there does need to be a certain element of awareness of the risks they ’ re taking . Some of these options have unlimited downside risk , so to lose more money than you put in , that ’ s something that worries me .”
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