Young investors are swarming to TikTok for financial advice — but should they?

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While social media platforms such as TikTok, Instagram and YouTube can be great for keeping pace with the latest food and fashion trends, they are not the best places to find trustworthy financial advice.

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so it was a success for some Miriam-Kareena Gad when she took matters into her own hands about her exorbitant home-heating bill — and quickly became a social media money maven.

For years, certified public accountants and budget analysts were paying ridiculous rates to heat her Montreal condo—a typical money-sucker for residents of Quebec, where winters are glacial and Hydro-Québec is the sole provider.

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Last winter, however, Gad found that she could reduce her heating bill by keeping her bedroom door closed during the day—and letting it stay cool—before opening it right before bed so that warm air could blow through the rest of her Montreal. Get out of the condo.

“I think I found a hack for this!” she said happily on tiktok, where the video of his discovery has been viewed 16,000 times.

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This saved her $22 dollars per month, which may sound like chump change to some, but in the world of millennial finance every dollar saved is a win.

Since February, she has been posting videos on TikTok Under the handle “mimismoneymoves,” an account that offers her more than 10,500 followers small life-hacks to help them save money.

Her videos cover topics like how to start saving for a down payment, how to prioritize RRSP contributions versus paying off student loans — even hacks on decorating an apartment on a budget.

Part of her motivation for starting the account, she says, was to offer an alternative to the dissemination of the abysmal financial advice revolving around social media.

Just last week, the Securities Administrators of Canada and the Investment Industry Regulatory Organization of Canada (IIROC) announced new rules for cryptocurrency ads on social media to curb misinformation and fraud.

But even those who provide perfectly legal financial advice often miss the mark, Gad says.

“A lot of producers boast about their huge stock portfolios, and the money they made by doing this one thing,” she said.

“It’s just not obtainable or accessible advice.”

Instead, Gad prefers to focus on cost-saving strategies that apply to most people’s lives—whether it’s grocery shopping, buying clothes, or reusing old items. All these colloquial activities can save consumers a lot of money in the long run.

Sam Lichtman, a certified financial planner from Saskatchewan, opened a tiktok account last year For many similar reasons.

Rather than offering financial advice, such as which stocks to buy, it educates its young audience on basic financial concepts such as mutual funds and RRSPs.

“Financial advice is telling people, ‘You should go out and do this,’ whereas financial literacy is telling people, ‘Hey, how does this work,’ and I try to differentiate with, ” They said.

He recently made a video on what to do if you’ve maxed out your tax-free savings account and are looking for other places to deposit your money.

“I don’t like saying, ‘Hey, invest in an unregistered account and you’ll get a lot of growth.’ It’s more like, ‘These are your options once you’ve maxed out your TFSA.’ I think it’s better than telling people what to do.”

The growth of financial advice on social media suggests that younger audiences will take their cues from platforms like TikTok for a long time to come. And that’s fine, Lichtman says, but they have to watch out for red flags.

“Avoid someone who suggests that something is guaranteed. If they say, ‘Do this and you’ll get rich financially,’ they’re probably wrong,” he said.

Most importantly, look at the creditworthiness of the accounts, says Gad.

“Anyone off the road can create an account and give financial advice. You want to know whether they are a CFP or CPA, that they have done the work that makes them qualified to mentor you,” she said.

Jacob Lorink is a Toronto-based reporter who covers business for the Star. Reach him via email: [email protected]

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