Who should I trust for information about money and investing?

If you do a quick search on the internet of how to invest your money, you will likely end up with millions of answers and many that seem to contradict each other.

In short, no one can tell you with certainty what investment will give you the best returns. But if you have specific questions about your finances, or are looking for where to start, there are many resources available to help you.

As a DIY investor, there may be a little work involved in finding the right method for you. But luckily, you don’t need to be an expert to get started. There are many products available for investors, such as funds, where stock selections are made for you.

Your investing platform should have good information to get you started on your investment journey. At AJ Bell, this can be found in the learn hub and through investment articles.

However, if you are looking for additional resources to help you invest, you need to make sure you can pick out the bad apples. One of the most important things to do when searching for information on investing is checking that your sources are reliable.

Have you been ‘finfluenced’?

In recent years, ‘finfluencers’ have grown in popularity. These are people on social media such as Instagram, Tiktok or YouTube who are using their platforms to share information about finance and investment.

They might have snappy videos and talk about money in a simple way, but that doesn’t mean they are experts. There is a risk that many people are giving out incorrect information or aren’t qualified to give advice or guidance.

Three-quarters (74%) of Brits who have been guided by social media to make investment decisions have either lost money or experienced a negative effect on their credit score, according to research by Capital One.

That’s worrying, particularly as 38% of Gen Z investors in the UK cited social media as a major decision maker to invest, according to the Chartered Financial Analyst (CFA) Institute.

You need to be extremely careful about trusting someone online to help you with money-related issues. Even if you are just receiving information from a finfluencer, and not being given advice, you need to make sure this person knows what they are talking about.

One of the easiest ways to do this is by checking their qualifications. Is this information coming from a company you know is legitimate, or is the person you are listening to qualified to give financial advice?

To be someone that is qualified to give financial advice, you must receive a Level 4 Financial Advice qualification that is recognised by the Financial Conduct Authority (FCA), a financial regulator. If someone does not hold this qualification, they cannot legally offer you financial advice, and they may not have the expertise to do so. You can check if someone is qualified as a financial adviser through the FCA register.

Finfluencers can also have ulterior motives with their videos apart from your best interest. The CFA found that 36% of the finfluencer content contained investment promotions, meaning the presenters were being paid to promote certain products. This could mean that the products being recommended to you are not necessarily of your best interest.

It’s also worth considering what market they are discussing: investors based in the US have a different set of tax regulations and available instruments that won’t be applicable to those in the UK.

Does mother know best?

Family can be the first place you turn for advice in many areas of life. According to Capital One, nearly 20% of people use friends and family as their primary source for financial information.

Speaking with friends or family who also invest can provide a level of comfort at the beginning of your experience, or when markets are having a period of instability.

But investments may not be their area of expertise, and even if they work in the finance industry, they are likely not an expert on the exact situation that applies to you.

Even if your family invests through a particular fund, or with a particular company, it’s important to analyse if that is the right decision for you as well. You may have different financial goals, or a different amount of money to work with that means something else may be better suited for you.

Do you need an adviser?

According to the FCA Financial Lives report, just 8.6% of UK citizens receive financial advice.

Financial advisers can be very useful for those who are dealing with large sums of money or who have a unique financial situation that could cause investing complications.

But it’s important to weigh if the value you are getting from a financial adviser is worth the cost. Advisers can charge their clients through a variety of different methods, such as a percentage of assets, for a set fee, or with an hourly fee. It’s important to assess how much those fees will eat away at your returns, and if it is a worthwhile service for your situation.