Wednesday 17 November 2021 4:32 pm

A new survey has confirmed the trends we saw during the pandemic, when retail investing became part of the zeitgeist due to a combination of social isolation, boredom, spare cash and rapidly innovating fintechs.

Over half (56 per cent) of 18-34 year olds in the UK who invest attribute their strategy to ideas published on social media channels, according to a new survey by Opinium.

But they aren’t collating their stock picking tips from journalists and analysts on Twitter, the survey of 2000 people reveals.

Instead, Reddit is the most popular platform for investment ideas for younger investors. This is perhaps unsurprising given that the self-styled “front page of the internet” was in the spotlight earlier this year when day traders on its forum sparked a huge rally in shorted stocks such as GameStop and AMC.

For Susannah Streeter, senior investment and markets analyst at investing platform Hargreaves Lansdown, this stat is “particularly worrying given that it’s where the meme stock frenzy erupted this year, with speculators piling into heavily pumped shares.”

“For some new investors, trading has become a game and a form of entertainment, rather than a well thought-out long-term investment strategy,” she warns.

“The risk is that they could get their fingers seriously burnt by following the herd into highly risky purchases, which could scare them off investing in the future.”

In a revelation that makes anyone over the age of 24 feel very old, video sharing platform TikTok is the second most popular platform for investment ideas for under-34s – with 12 per cent of those surveyed tipping it as their number one source.

By contrast, just 4 per cent of the 55–64 year-olds surveyed said they get investment ideas from social media, preferring newspapers instead.

It’s worth reading beyond the top line, however, as 43 per cent of 18-34 year olds said that they also go to the websites of regulated financial companies, combining the information they gather from social media with more traditional sources.

On one end of the spectrum, defenders argue that these social media platforms can be credited with getting a new generation into investing at unprecedented scale and creating a financially savvy cohort of retail investors.

But at the other end, regulators have issued several warnings about the dangers of promoting high-risk assets such as cryptocurrency on social media, where several influencers are paid to promote investments to their thousands of followers.

As their posts are not regulated, they fail to disclose important details surrounding the risks that these investments may involve.

The chair of the FCA Charles Randell fired a warning shot at social media influencers in September when he told investors to avoid taking investing advice from social media influencers including Kim Kardashian.

The star had recently posted a paid ad asking her 250 million Instagram followers to speculate on crypto tokens by “joining the Ethereum Max Community.”

“Social media influencers are routinely paid by scammers to help them pump and dump new tokens on the back of pure speculation. Some influencers promote coins that turn out simply not to exist at all,” he said at the Cambridge international symposium on economic crime.