A MoneySmart study reveals that as financial hubs, Hong Kong SAR and Singapore face shared challenges and opportunities when navigating financial advice on social media, now used by more than half (52%) of respondents as their main source of financial advice. Insights from industry experts in both markets, including Ethel Yow, APAC & ME Social Media and Content Manager at IG Markets and Joe Yu, Chief Marketing Officer at Futu Securities, provide actionable tips to help consumers make informed decisions while avoiding common pitfalls.
- Be cautious of bold claims
Ethel and Joe advise being wary of financial advice that promises guaranteed returns or “risk-free” investments, often framed as clickbait such as “100% win rate strategy” or “How to become a profitable trader.” Sensational headlines are designed to attract attention, but credible sources will offer balanced insights about both potential returns and risks. - Verify the information
Social media is largely unregulated, meaning anyone can post financial content regardless of expertise. Ethel recommends cross-checking advice with reputable financial news outlets, official company reports, and licensed financial advisers, while Joe suggests a three-pronged approach: verify the source, consult multiple sources and assess the information’s timeliness. Seeking professional advice and carefully evaluating risks are essential steps before making significant financial decisions. - Understand the risks
Social media offers real-time market sentiment and a variety of investment ideas, which can broaden perspectives. However, Joe warns that emotional triggers like FOMO (fear of missing out) can lead to impulsive decisions that often do not align with sound financial planning. - Balance short-term excitement with long-term goals
To avoid focusing solely on short-term returns, limit speculative investments to a small portion of your portfolio while balancing them with more stable assets like index funds or bonds. Both experts recommend setting clear financial goals, creating a budget, diversifying investments and regularly reviewing your portfolio to maintain long-term financial stability. - Do your own research and use trusted platforms
Independent research is critical to understanding the risks, potential returns, and suitability of an investment. Joe emphasises the importance of choosing regulated brokerages, such as those licensed by the SFC in Hong Kong, for secure and transparent transactions. Trusted platforms offer reliable tools and resources that support informed investment decisions. - Stay alert to scams and avoid herd mentality
Both Ethel and Joe highlight the risks of scams impersonating legitimate entities, such as investment platforms or financial influencers. Always verify the authenticity of information and social media links before acting. Avoid blindly following trends without assessing risks, as impulsive decisions can lead to significant losses.
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