When Corynn Fowler, 31, turned her camera around and started filming her own financial advice to post on TikTok two years ago, she didn’t have high expectations.
It began as an experiment to market her offline business, How To Adult School, which teaches followers the basics of financial literacy.
The self-taught creator and educator from Collingwood, Ont., tells Global News she was “very surprised” to see the interest accumulate on her videos.
While the TikTok algorithm can be “random” at times — giving hundreds of views to some videos and hundreds of thousands, if not more, to others — Fowler says she has around 125,000 followers on the platform.
“I was blown away,” she says. “Within a few weeks of making TikTok videos, it became one of the main drivers of new people through to my business.”
Financial advice is a popular topic on TikTok, with videos grouped under the “FinTok” tag receiving 4.4 billion views according to an analysis by NerdWallet Canada. But experts who spoke to Global News say the booming popularity of the financial advice on social media comes with pitfalls.
Shannon Terrell, lead writer and spokesperson for NerdWallet Canada, says that while finance content isn’t restricted to TikTok, the platform is where “influencers tend to be gaining the traction.”
Fowler says that her content is geared towards educating her viewers about the basics of financial management that her audience might not have learned in school or otherwise gotten exposure to.
Because of that, her audience skews younger to people in their 20s and 30s, she says.
One of the videos on her account that has recorded 1.6 million views so far is an explanation of why it pays to start investing early — and how waiting can cost you.
Beyond the basics of how to build a budget, Fowlers says the kind of content that she tailors to her audience are how-tos on improving credit scores or on how certain investment vehicles can save money on taxes.
“One of the defining features of the audience is that there are people who realize that money is a pain point and a problem in their lives, but they don’t necessarily know why,” she says.
“They don’t understand yet that there’s this whole sort of ecosystem of topics that play into personal finance that they need to learn about and that they need to learn how to manage.”
Cost of living crisis ‘driving’ FinTok popularity
Fowler says that another benefit to TikTok is that the engagement allows her to get to know her audience more and can answer questions from the comments directly with a video reply.
She feels the ongoing cost of living crisis has been “driving” a lot of the demand for her own financial content as viewers try to get ahead as prices soar on rent and other areas of life.
Financial literacy can’t necessarily solve the cost of living crisis, Fowler says, as many of those struggling to get by face a fundamental gap between what they make and what they can afford. But getting reliable financial advice that most Canadians miss in school could help them get ahead when the worst of the crisis passes, she says.
While she says she’s been largely self-taught in financial management thanks to her parents exposing her to money matters from an early age, she points to a lack of formal financial literacy focus in Canadian curricula as a gap in education.
“I feel like our approach to financial literacy and teaching personal finance education is pretty backwards. There basically is none. And we’re sort of expected to step out into the world as adults and figure it out then,” Fowler says, giving a nod to How to Adult School’s tongue-in-cheek name.
Social media platforms may be the go-to destination for younger generations who don’t have a direct contact at their bank or other financial planner in their life yet, Terrell notes.
But the problem with using TikTok and other social media platforms as a primary source for financial advice is that it’s not regulated, she adds.
While Terrell believes content like “FinTok” and the growth of financial advice shared on social media platforms can help “democratize” financial literacy, it also opens its viewers up to exploitation if not approached with caution. She flags investment scams, multi-level marketing ploys and “risky” side hustles as common concerns on the platform.
“Anybody can set up an account and say almost anything that they’d like,” Terrell says. “And just because it’s viral doesn’t mean it’s true.”
TikTok appears to be aware of the potential risks to users as well. A search for the #FinTok tag comes with a warning label on the platform, reiterating that content is “not verified” and urging users to “recognize scams and be mindful of financial services and products.”
While Instagram doesn’t appear to have a direct warning when financial content is posted on its platform, it does warn about how to recognize investment scams like “get rick quick” schemes on its website.
Red flags on FinTok
Fowler, too, recognizes that not every creator is well-versed in finance or careful with their content.
She recommends that users steer clear of any creator who is giving “prescriptive advice” to a general audience without any knowledge of individuals’ specific circumstances. While investing in one stock or using a particular wealth-generating strategy might be right for one individual, she says that blanket advice won’t be applicable to everyone’s financial situation.
The prevailing mindset that Terrell recommends for social media users is to be skeptical of claims that promise a high return with little to no risk.
“Essentially, if something sounds too good to be true, it probably is,” she says.
Terrell has a few buzzwords that she recommends users watch out for. Cryptocurrencies, “forex” (foreign exchange) and options trading can be “highly volatile” strategies for generating wealth with plenty of risk around them.
Also consider the source of the advice, Terrell says. If a creator on TikTok claims to have a designation as a certified financial planner or analyst, these credentials can be verified on sites such as FB Canada and the Canadian Securities Institute.
The dangers of FinTok aren’t limited to scammers on the platform, however.
Take the popular “Girl Math” trend, Terrell says, which sees users justify their purchases with “mental gymnastics.” She explains that in this mindset, anything that costs less than $5 or a purchase that’s made with cash is “free,” or a purchase returned for a refund is actually a “profit.”
In addition to propagating notions that women are somehow worse with financial decisions than men, Terrell says “Girl Math” can encourage impulse spending and blur the lines between wants and needs, which is a hallmark of responsible money management.
Terrell says that she’s seen great content about strategies for how to portion out paycheques between saving and spending and other reliable financial advice on social media. But if users don’t know how to differentiate the helpful content from the scams and bad ideas, FinTok could end up doing more harm than good to the most vulnerable on the platform.
“I’m all for increasing financial literacy. I think that’s a wonderful movement,” she says.
“I just think as long as people know how to assess the claims and the information that they’re receiving.”
— with files from Global News’s Nivrita Ganguly