Social media represents the first point of information for many people, as insights from a range of topics can appear on someone’s feed without them having to seek it out.
This ease of access poses a risk if the advice is acted upon without further interrogation or research.
As most people who follow financial advice from social media regret it, it is worth remembering the value that an accountant can provide.
Social media is full of charismatic people offering their opinions and insights into all manner of things and some of them may even know what they are talking about.
However, the barrier to entry is so low for content creation that anyone can claim to be an expert before peddling falsehoods or misunderstandings as though they are legitimate.
AI is making the situation worse as social media influencers may be using this as their only point of research and individuals and businesses could be turning to Large Language Models (LLMs) to replace their accountant.
TSB conducted a study to assess the impact of this unverified stream of advice and found that 32 per cent of people had followed financial advice gained through social media.
Of those who had taken action, 56 per cent of them had lost money and 59 per cent of them regretted ever having followed the advice.
With an average loss of £700, the people who had lost money had seen the equivalent of around five months of energy bills for the average UK household evaporate.
In more extreme cases, some respondents had committed investment fraud based on social media advice, with those people losing an average of £3,000.
AI was less popular as a source of advice than social media, being used by only 24 per cent of people, but 51 per cent did not feel they would be able to tell if advice was AI-generated.
This highlights the danger of unauthorised advice, as it requires an expert who is knowledgeable on the subject to fully dissect when something is legitimate and when it could cause damage to a person’s or business’s financial position.
Times may change, but the rigorous approach to finances adopted by accountants does not.
Only accountants have the time and energy to review every new piece of legislation and guidance to understand how they interact with each other.
As the Autumn Budget is coming soon, happening on 28 October, it is more important than ever to seek out trusted sources of advice.
There will be a host of misinformation and misunderstandings before and after the Budget that could see unwise decisions being made if these things are acted upon without proper verification.
An accountant’s role is to assess the individual circumstances of a client and provide tailored support that meaningfully strengthens their financial position.
Our team take the time to get to know your finances so that we can support you with effective budgeting and clear financial forecasts.
Many people struggle to manage tax exposure, often paying more than is necessary or risking penalties for missing deadlines or submitting inaccurate information.
Social media advice will worsen this position due to it not understanding the nuances of your position and potentially even advocating for some taxes to be skipped entirely – something that is likely illegal and will see you face punishment if attempted.
It can be difficult to put an exact figure on the value of accounting support, as such a number would have to include the penalties you do not face paying, the tax efficiency you achieve and the peace of mind that comes from expert guidance.
To find out the value of accounting support for yourself, get in touch with our team.
