Nearly 40% of Americans surveyed in a Creditcards.com poll said “friends and family” are their top resource for receiving financial advice, and almost one third — 31% — said they get no financial advice at all.
Generation Z, the youngest demographic group that was born after 1996, said in the poll that they used friends and family the most at 53%, while 28% of their financial advice comes from social media platforms and influencers.
“Sometimes that advice might be really good. Sometimes it might be really bad,” Creditcards.com senior industry analyst Ted Rossman told WTOP’s Bruce Alan.
“They may be good people, but there’s a good chance they don’t know much about managing money,” Rossman stated in the study.
Overall, U.S. adults turned to financial websites 25%, financial advisers 24% and financial institutions 24% for their financial advice.
Significantly fewer people — 13% to 14% — used social media platforms or influencers, newspapers or magazines, books, podcasts, radio or TV for their financial advice.
But Rossman said financial advisers can be costly, and not everyone can afford to use them.
He pointed to early schooling as a potential source for personal finance education, but said not enough people are receiving it.
“There’s only about half of states that have a stand-alone personal finance course mandated,” he said. “While some other states require that it’s baked into the K-12 curriculum, most people are not getting a lot of finance education at school or at home. Most people would put themselves in the self-taught category.”
One of the starkest findings in the poll is that 42% of the respondents in the lowest-income bracket said they don’t get any financial advice at all, compared to 30% of middle-income earners and 14% of highest-income earners.
“What was most troubling to me was that one in three Americans are not getting any financial advice at all.” Rossman said. “With little formal personal finance education, most people are forced to go it alone.”
Financial advisers and financial institutions were viewed in the poll as the most trustworthy source for advice, ranking 70% and 69% respectively. Friends and family were almost as high at 64%. Books came in at 60% and financial websites fared well at 57%.
“Not everybody needs a financial adviser,” Rossman said. “Especially a lot of younger adults are finding they can go at it on their own or get some help from a robo adviser. Ultimately it’s kind of — to each their own. Typically the older you are the more complicated your financial situation, then you are more likely to have a financial adviser.”
Social media platforms were viewed the least trustworthy. Only 21% of respondents trust them as sources of financial advice.
Rossman said the most important aspect of financial advice is how people use the information.
“While social media in general ranked at the bottom of the trust meter of all the things we asked about, I would stress there’s no single medium particularly good or bad at giving financial advice,” Rossman said. “Ultimately it really depends more on your circumstances and how you use that information.”
WTOP’s Bruce Alan contributed to this story.
