Just 80% of Forex Advice on TikTok is Misleading? I Think it’s More!

I’ve just emailed Lucy Castledine, Director of Consumer Investments at the Financial Conduct Authority (FCA), to ask if she’d like to appear on a panel discussing social media marketing at our London Summit in September.

I did this because she made some excellent comments in front of the Treasury Committee about how the FCA recognises the part social media can play in helping people understand financial products better.

But the FCA says it wants “legitimate providers of financial services in this space to crowd out those [it is] having to take action against”.

I don’t think that’s going to work, because as with all marketing, the stuff that works is a bit edgy and pushes boundaries. The moment you start adding risk warnings, endless caveats and boring jargon to social media videos, people stop watching them and the videos drop out of the algorithm.

The only way to sort the wheat from the chaff on social media is for the regulators to start fining the networks for allowing the perpetuation of scams.

Facebook’s Scam Problem

I’ve written extensively about scams, and how to avoid them. Our own stock market podcast was cloned via AI on Facebook and Instagram and directed  users to a WhatsApp investment scam group.

When we reported the fake ad, Meta responded with utter idiocy. After reviewing our report, it did not recognise the video as a clone and so failed to remove it. This case was covered by the BBC, Metro and The Times.

In a previous case, Facebook took over 1,000 days to remove another scam ad that I reported. Yet still it persists, even Martin Lewis, who sued Facebook for allowing his image to be used in scams, still has to go on TV and tell people that videos of him promoting crypto scams are fake and that he “doesn’t do ads”.

So I was delighted to see that the comparison site BrokerChooser has done research into how much rubbish about forex is spoken on social media.

This type of research is done for PR, but it’s quite interesting, and anything that raises the awareness of this issue is a good thing. I like BrokerChooser and was hosting a panel on options trading at a conference the other day where Linda Sallai, from BrokerChooser, was also talking on a panel about affiliate marketing, alongside Jon Ostler, another broker affiliate from Finder, which also runs the Finance Affiliate Club. Unfortunately, I didn’t get a chance to talk to either afterwards, but maybe next time.

BrokerChooser is good at calling out scam brokers, and Sallai spoke about how the industry simply does not do enough to combat scammers.

TikTok’s Forex Finfluencers

In this case, the focus was on potentially misleading video content. Below is what BrokerChooser said about its research into forex advice on TikTok.

“According to new research from the forex broker experts at BrokerChooser, it has been uncovered that up to 80% of forex advice given out on TikTok from ‘fin-fluencers’ could be potentially misleading.”

I think this is too low, I have not seen anyone at all talking even a modicum of sense about forex trading on TikTok. I should say at this point that I started off my career as a broker and have traded a lot of forex in a personal and professional capacity over the last 20 years.

“The experts analysed 100 of the best-performing TikTok videos across a range of forex topics to uncover the scale of misinformation. What they uncovered was alarming — from a major lack of disclaimers to a high volume of videos focused solely on flaunting wealth and lifestyle, with little to no trading context.”

This is exactly my point, the more extroverted and brash you are, the more people get suckered in. I can think of someone else like that at the moment… He should come with a disclaimer.

“Overall, BrokerChooser’s analysis revealed that a staggering 80% of forex advice on TikTok was potentially misleading, with only 6%—or 3 in 50 videos—encouraging viewers to do their own research. Of the top-performing videos, 60% of content came from male fin-fluencers, 35% from female fin-fluencers and 5% came from unspecified or AI-produced content.”

Only 1 in 7 of the videos included the relevant disclaimers and warnings, but 1 in 5 were promoting a product or service. I’ve watched many such videos that include a vague disclaimer that’s apparently there to make it all seem more legit.

“Less than a quarter (23%) of forex related content on TikTok contained actual forex trading information. Instead, videos often focused on lifestyle imagery, vague motivational claims or promises of quick wealth. This was often done without disclosing risks or from creators without verifiable credentials, creating a misleading impression of forex trading as a guaranteed route to financial freedom as opposed to a complex, high risk activity.”

The problem with these videos is that they are absolutely hilarious, almost verging on parody. If you look through the comments, they are mainly from people calling BS. I can spend hours utterly transfixed by the gall of young men in G-wagons being asked what they do for a living or getting VIP parking spaces in bus lanes.

Some trading educators make money by referring people to brokers who then b-book their trades, essentially making money when they lose. Many of the flashy gits professing to trade don’t actually make money from trading profits but from suckering people into opening accounts and depositing money, and then getting a kickback from the trading platform.

FCA-regulated brokers, of course, do not do this sort of thing, but the trading platforms that fraudsters recommend are either not regulated at all, or regulated in tiny island in the middle of the ocean, giving the veneer of legitimacy.

Edith Balazs, Content Editor Head at BrokerChooser, who has previously worked at Bloomberg and Dow Jones, said this about the research:

“The findings… shine a light on the overwhelming majority of forex-related content on TikTok as potentially misleading or harmful. The research uncovered that very few creators encourage their viewers to do their own research or provide any meaningful trading information. 

“Instead, it seems that the platform is saturated with individuals flaunting their wealth and lavish lifestyle without offering any transparency or context, which could leave viewers vulnerable to false expectations and financial risk. This is particularly concerning as a recent SEC report suggested that around 70% of retail forex day traders lost money each quarter and two out of three forex customers lose money overall.”

Social media is not yet a reliable source of forex education, but the fact is that TikTok, Instagram and YouTube are where people learn things these days.

Last week, on TikTok I learnt how to cook Toad in the Hole properly from the Chef who used to cook for William and Harry. I’ve learned to deadlift properly from a guy who dresses up as a cleaner and pranks people in the gym (squeeze the back) on YouTube. We’ve decorated our house from styling tips on Instagram. I finally managed to connect my iPhone to the screen in my car with a dongle thing after being fed an advert, I was really glad to see that because it had been driving me mad for years.

If people want to learn about investing, trading and the financial markets. Social media is the first place they are going to look for information.

Having said that, when I did a video for Youtube on “How to buy Tesla shares in the UK” someone called me a bell-end in the comments.

Which I thought was a bit harsh. I was only trying to help mate.

But, I pulled by back a few days ago lifting a rowing boat down from the third rack of a trailer and stupidly bent down too far. I am 100% certain that some of the stuff suggested on Youtube shorts, when I searched for how to recover quicker, would leave me paralysed.

So, to finish on a serious note, and back to the real problem: the platforms have no incentive to care if what they host is misleading, until the regulators give them a reason to care.