Financial advice on TikTok

Peter Huminski, founder of Thorium Wealth Management, first downloaded TikTok to watch videos sent by his oldest child, who will be a college freshman this fall.

After starting with “cute cats and people doing silly things,” TikTok’s algorithm was soon recommending videos aligning with Huminksi’s professional life as a financial advisor: real estate, insurance strategies, personal finance education and investment tips.

And a lot of bad, even dangerous, financial advice, he says.

“More and more of these financial videos started showing up and I thought, ‘oh my god, this advice is horrible,’” Huminksi says.

Though encountering bad financial advice isn’t new, the surging popularity of TikTok, especially among young Americans, means poor counsel can reach a huge audience in short order. The video sharing app, which limits videos’ length to 60 seconds, reached 2 billion downloads in April. TikTok’s parent company, ByteDance, is valued at over $100 billion, according to CNBC.

While finance remains a relatively small interest — the #investing tag has 400 million views while #skincare has 11.2 billion — there is no shortage of insurance salespeople hawking complex annuities or Robinhood day traders promoting guaranteed returns, Huminski says.

“It’s amazing how much misinformation and half-truth videos are out there,” he says.

Taylor Venanzi, owner of Activate Wealth, says that while he sees some good information on TikTok, the get-rich-quick schemes seem to gain the most traction.

“There’s this one guy that keeps popping up on my feed, basically comparing real estate investing to investing in the stock market,” Venanzi says. “It’s blatantly wrong information, and there’s no way for the consumer, especially the uneducated consumer, to navigate that.”

Huminski is concerned about the influence TikTok is having on the next generation’s financial decisions. And with free-trading apps like Robinhood making it easy to act on bad advice, Huminski worries people could end up being hurt.

The Robinhood application is displayed in the App Store on an Apple Inc. iPhone in an arranged photograph taken in Washington, D.C., U.S., on Friday, Dec. 14, 2018. The Securities Investor Protection Corp. said a new checking account from Robinhood Financial LLC raises red flags and that the deposited funds may not be eligible for protection. Photographer: Andrew Harrer/Bloomberg

To make other advisors more aware of what they are up against, he now shares a “TikTok offender of the day” to his Twitter feed.

One video extolling the values of annuities over 401(k) plans became Huminski’s most popular Twitter post to-date as advisors weighed in with disbelief and horror.

“With the 401(k), your money is going to go up and down with the stock market. With an annuity, it will only go up,” TikTok user Paula Heckenast says in the video. “So that means as the stock market goes up, your money grows. If it dips, it stays. It never goes down.”

The problem with Heckenast’s video is it doesn’t discuss fees, which can diminish the cash value of an annuity in a zero- or negative-growth year, Huminki says. Guarantees and access to the funds can vary widely product to product, and TikTok’s 60-second limit makes it impossible to discuss something as complex as annuities with the nuance they require, he adds.

“What she said wasn’t necessarily false, but there’s more to it. It’s very misleading with how she positioned a lot of it, and that’s where I start to take issue,” he says.

The video also illustrates a problem with disclosure on TikTok, Huminski says. Heckenast is a professional makeup artist who sells life insurance on the side, according to a link she shared on social media. This role isn’t made immediately clear in her TikTok profile or in videos promoting insurance products, Huminksi claims.

Financial Planning was unable to reach Heckenast for comment.

This issue is nothing new or unique to TikTok, says Jennifer Connors, co-lead of the North American broker-dealer regulation team at law firm Baker McKenzie. While regulators are likely looking at concerns regarding TikTok’s particularly young audience, there’s nothing to stop non-investment professionals from using new media platforms to pontificate on markets and investing.


“If they are engaging in anything that is truly some type of a deceptive scheme and they’re trying to defraud people, then that’s criminal behavior and can obviously be reviewed and dealt with,” Connors says. “[TikTok is] fundamentally not that different from other media. Unfortunately, it can be misused, but there’s probably a way to do it in a compliant way as well.”

Some advisors are starting to find success on TikTok. Dr. Brad Klontz, founder of the Financial Psychology Institute and managing principal of Your Mental Wealth Advisors, has nearly 94,000 followers on the platform.


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Ian Bloom, owner of Open World Financial Life Planning, started using TikTok three weeks ago to share short clips of video he already posts on YouTube. For minimal effort, his TikTok videos receive an average of 150 views each — not a viral sensation but better than platforms like YouTube, Twitter or Instagram, he says.

In that response, Bloom sees a chance build trust with a community currently ignored by most firms and advisors.

“There are no Edward Jones or Raymond James advisors on there. I’m kind of this lone planner in this sea of non-planners,” Bloom says.

Despite the bad advice, advisors like Huminki and Venanzi are bullish on TikTok as a way to introduce investing and financial planning to the next generation. A video on annuities or options trading can inspire someone to learn more and even reach out to a financial advisor to ask questions, Huminki says.

Plus, an effective way to combat bad financial information is for professional advisors to produce more good advice, Bloom says.

“People hunger not just for information, but in a consumable form built for them,” Bloom says. “Get in there and figure out what works.”

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