(Bloomberg) -- A senior European Union official has warned of the risks of financial advice on platforms such as TikTok and called on social media companies to help authorities to ensure people can access reliable information.
“A lot of work needs to be done in the area of social media where there is advice being given around finance,” Financial Services Commissioner Mairead McGuinness said at an event in Dublin on Thursday.
“I understand TikTok is a great source of financial advice -- if you were discerning enough to know whether it was good or bad,” she added.
McGuinness appeared on a panel with Irish Central Bank Deputy Governors Sharon Donnery and Derville Rowland that discussed the need for adequate financial education amid the gamification of investing, the rise of “finfluencers” and new regulatory challenges such as crypto assets.
It's an issue affecting regulators globally, with the Securities and Exchange Commission last month agreeing to settle with Kim Kardashian over allegations she promoted a crypto token without disclosing she was paid.
“The more vulnerable the person, the more they will look for the unreal opportunity to make a financial killing -- where in point of fact they may be killed by that very decision,” McGuinness said. “There's need for discussion both within the financial system and those who are part of it but also with the social media providers as to what is acceptable.”
McGuinness noted that the “traditional,” more complex way of talking about finance may not help the new generation of retail investors.
“I think we have the capacity to focus on what the essentials are,” she said. “So don't promise something that you can't deliver on and if it sounds like it's too good to be true it usually is too good to be true. There are simple truths from our past that we can bring into this discussion.”
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