- 23 percent of Gen Z own crypto, with 66 percent taking short-term speculative approaches
- ASIC warns that reliance on AI and finfluencers increases financial risks for Gen Z
- 72 percent of Gen Z saw social media crypto ads; 41 percent were contacted to invest
Australia’s financial regulator is urging young investors to be cautious when relying on social media influencers and artificial intelligence (AI) tools for financial advice. The warning comes amid new survey results showing that nearly one in four Gen Z now own cryptocurrency, with many relying on unverified sources for investment guidance.
The survey, conducted between November 28 and December 10 with 1,127 respondents aged 18 to 28, revealed a growing reliance on digital platforms for financial information. ASIC highlighted that this trend may expose Gen Z to higher risks, particularly in volatile markets like cryptocurrency, where short-term speculation is common.
Gen Z Turns to AI and Social Media
The study found that 63% of Gen Z use social media for financial information, while 18% rely on AI platforms. YouTube alone is used by 30% of the cohort for investment guidance. Despite this, trust levels in these sources remain high: 56% say they “somewhat or completely trust” financial information on social media, and 52% trust finfluencers, social media personalities who discuss finance or investment topics.
Notably, AI platforms ranked as the most trusted source at 64%. As a result, ASIC emphasized that relying on a narrow range of sources, particularly those designed for engagement rather than accuracy, can increase financial risk.
The regulator warned that algorithms driving online content often prioritize clicks and views over credible guidance, potentially shaping Gen Z investment decisions without reflecting individual circumstances.
Crypto Adoption and Speculative Behavior
Essentially, the survey revealed that 23% of Gen Z own cryptocurrency. Among these investors, 66% take a short-term or speculative approach to their holdings, while 29% base trading decisions on social media or influencer content. Nearly a quarter of crypto investors attempt to “pick a winner” by buying newly released coins, and 15% invest mainly for entertainment or experimentation.
ASIC also reported that 72% of Gen Z have encountered social media advertising promoting crypto in the past year, and 41% have been directly contacted by individuals offering investment guidance. These findings underline the potential for young investors to be misled by unverified or promotional content.
Regulatory Oversight and AI Guidance
From a regulatory perspective, ASIC has previously acted against financial influencers, issuing warning notices to 18 individuals in June last year for allegedly providing unlicensed advice on high-risk products. The regulator is now monitoring AI-driven financial tools, warning that entities offering personalized investment recommendations without a license may be breaking Australian law.
Commissioner Alan Kirkland stressed that young investors must be aware of the risks associated with volatile investments like cryptocurrency. He highlighted that social media marketing often encourages investment in scams, and unqualified influencers frequently target superannuation funds, which are among Australians’ most valuable financial assets.
“We’re conscious that there’s a lot of marketing activity on social media to encourage crypto investment, and our work has shown some that is actually encouraging people to invest in scams,” Kirkland said, speaking with the Australian Financial Review (AFR) on Sunday.
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Educating Gen Z on Financial Literacy
Overall, ASIC encourages Gen Z to critically evaluate financial advice and seek reputable sources. The regulator said young investors should “sense-check” recommendations from AI and social media and consider the reliability of the source. With crypto adoption rising and AI tools becoming increasingly integrated into financial decisions, ASIC’s warning signals the importance of informed investing for the next generation.
By emphasizing credible guidance and highlighting the risks of unverified advice, ASIC aims to ensure that Gen Z can navigate financial markets safely, particularly as cryptocurrency and digital investment platforms continue to grow.
