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A landmark survey of individual investors across the UAE by Friends Provident International (FPI) has highlighted the need for tighter regulation of financial advice given by “celebrity” social media influencers.
A key feature of the UAE financial advisory landscape is the significant role played by social media influencers.
No fewer than 24% of individual investors said they were “very confident” in taking financial advice from social media influencers. Another 27 percent said they were “somewhat confident” to do so.
These figures vary by nationality. At one extreme, 60% of UAE investors are “very” or “somewhat” confident in taking financial advice from social media influencers. At the other extreme, the corresponding figure for Westerners is only 35%. Some 46% of Westerners said they were “somewhat insecure” or “not at all confident” in accepting financial advice from social media influencers.
Social Media Influencers: Financial Advice for Some, but Financial Futures Advice for Very Few
Later in the survey, investors were also asked to name which advice provider would make them feel more empowered to make decisions about their financial futures.
Only 6% of investors mentioned social media influencers. Increasingly important are friends/peers (13%), bank advisors (14%), independent financial advisors (IFAs – 26%) and family (31%). About 8% of investors rely solely on their own research, while 2% rely on advice from other sources about their financial futures.
The extent to which investors rely on family members for advice on their financial futures varies widely. Women (39%) are more likely than men (27%) to use family members as their only source of advice. The same is true for those 18-24 (36%) compared to those 45 or older (26%). Investors with a monthly income of AED10,000 (US$2,720) or less (37%) are more dependent on family members than those earning more than AED25,000 (22%).
David Kneeshaw, group chief executive of International Finance Group Ltd, which owns FPI, noted: “Individual investors in the UAE tend to place too much weight on the views of social media influencers – who may be completely ignorant or paid to promote a particular idea or product.
“A concerted campaign emphasizing the benefits of professional advice is not all that is needed. Like other countries in which FPIs operate, the UAE should have stricter regulations to curb the influence of social media influencers.” – trade arab news agency
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