The age-old stereotype of a person in the pub giving out dodgy advice with the utmost confidence on every possible topic has been replaced by social media and AI.
Unfortunately, the sense that getting information from a complete stranger is not the best idea has fallen away, given the charismatic nature of social media influencers and the way in which they present ideas with confidence.
Rather than being a cheap alternative to accountants, the financial loss risked by this unauthorised advice makes it more apparent that there is a lot of value left in engaging with professionals.
How dangerous is it to listen to finance advice from social media?
Listening to any advice from social media carries immense risk given the incredibly low barrier to entry for creating and sharing content online.
While some platforms may have a community note system or equivalent designed to monitor for misinformation, there is still little that can be done to stop anyone with a camera recording themselves speaking confidently and uploading it for all to see.
Social media is a mix of those who know what they’re talking about, those who think they do but are wrong about critical points and those who are just spreading lies.
To understand this problem, TSB conducted research to determine how social media financial advice was affecting those who attempted to follow it.
It found that 32 per cent of those asked had followed financial advice from social media and 56 per cent of them had lost money as a result.
With an average loss of £700, the social media financial advice had robbed people of the equivalent of around five months of energy bills for the average UK household.
Losing money was not the only cause of regret for those who followed social media financial advice, as 59 per cent wished they had never listened to the guidance that had been thrown out to them.
Alarmingly, there were some who had been convinced to take part in investment fraud and had lost an average of £3,000.
AI was also a present threat for many, as while only 24 per cent of people used it for financial advice, 51 per cent of people would not be able to tell if advice was AI-generated.
When an AI is asked a question, it has a chance of inventing information to fill a gap in knowledge and this ‘hallucination’ is presented with as much confidence and as many fake pieces of information as required to make it believable.
If a person is using AI for financial advice, or a social media influencer is using it as their only source of research, it is possible that complete fabrications are being adopted as legitimate pieces of guidance.
Are accountants a cost-effective investment?
While social media and AI are often free to access and use, the amount that you risk losing when trusting the advice given in these places is substantial.
As such, it is better to only seek guidance and support from those who have dedicated their careers to understanding the intricate ways that legislation and guidance interact with each other and affect a client’s unique circumstances.
This is more important with the Autumn Budget coming on 28 October, as it is likely that there will be a wave of misinformation around the event.
Understanding how you will be affected by any changes will let you move forward with confidence and our team is ready to help you with this.
We take the time to review your finances, understanding your position with clear budgeting and accurate financial forecasts.
You can become more tax efficient and compliant with our experts supporting you, rather than listening to social media, where the idea of not paying taxes is often thrown around as a viable option.
The true value of an accountant comes from the penalties that you do not need to pay due to being compliant, the confidence that comes from understanding your financial position and the money saved by being tax efficient.
Discover the value that comes from accounting support you can trust by speaking to our team.