Mary Delahunty, CEO of ASFA, said while it is alarming to see the reliance by young Australians on social media for financial advice it also illustrates their desire for information and warned there is an increased risk of financial cybercrime if something is not done to remedy this situation.
“The research also indicates that all age cohorts are under-advised, highlighting the urgent need to make financial advice from trusted sources more accessible and affordable to ensure favourable retirement outcomes for all Australians,” Delahunty said.
The research found that of the 51 per cent of those aged 18–34 who say they have sourced financial advice relating to retirement or superannuation, social media was the second-most common (15 per cent) source of advice, after friends and family (36 per cent). Only six per cent had sought advice from professional advisers, and six per cent had been advised through their super funds.
According to the Australian Institute of Criminology, younger Australians are consistently more likely to report having been cybercrime victims than their older counterparts.
Examples of scams involving superannuation include:
- Criminals posing as advisers convincing fund members to transfer their super fund balances to them under the guise of setting up a self-managed super fund.
- Scammers offer to help fund members effect an early withdrawal of their super — for example, by misrepresenting medical problems — collecting a “fee,” and stealing personal data.
“We are seeing a much higher degree of trust in social media-sourced advice from younger Australians, with 33 per cent of those in the 18–34 cohort saying they trust social media advice, compared to 18 per cent in the 35–49 cohort,” said Delahunty.
“As an industry, we have seen a number of examples of high-pressure marketing tactics, including targeting account holders through social media, which ASIC has identified as a growing concern.”
She said most scams begin through interactions over platforms like Reddit, TikTok, and X.
“Young people’s personal trust in social media advice, combined with an increased likelihood to seek advice over social media, makes them particularly vulnerable to cybercrime and exploitation that threatens their superannuation balances and consequently a comfortable retirement,” she added.
Another concerning statistic from the research shows that Australians in all age cohorts are underserviced with financial advice. In each age cohort, there was a large proportion who said they had never consulted any source of advice concerning their superannuation and retirement.
It showed that 49 per cent of those aged between 18-34 had never sought financial advice, while for those between 35-49 years it was 54 per cent and for those between 50-64 years it was 51 per cent. For those 65 years and older it was 42 per cent.
“It’s concerning to see that around half of Australians of all ages have never accessed financial advice. Quality financial advice can make the difference between financial insecurity and a comfortable retirement,” Delahunty said.
“The problem that underpins both young Australians’ reliance on social media for financial advice and all age groups’ lack of advice is that advice from trusted sources is too costly and difficult to access.”
