Gen Z Investors Warned About Risks of Social Media Influencers and AI Chatbots

Australia's financial watchdog has expressed concerns about the growing trend of young investors relying on social media influencers and AI chatbots to make financial decisions.

The Australian Securities and Investments Commission (ASIC) released a survey that found 63% of Gen Z uses social media for financial information, with 18% using AI platforms. The regulator is worried about the spread of misinformation and scams through these channels.

According to the survey, 23% of Gen Z own cryptocurrency, with 29% of those trading based on social media and influencer content. ASIC has warned that influencers may 'set unrealistic expectations' about investment returns, market volatility, and long-term investing.

The regulator is also keeping an eye on marketing activity designed to drive people to make investments, including some scams. ASIC commissioner Alan Kirkland said the regulator will be watching closely what types of financial information are being derived from AI tools, as licenses are required for giving out concrete financial recommendations.