BaFin – Expert Articles – Generations Y and Z look to finfluencers

A BaFin survey carried out in May 2024 demonstrates a clear trend: adults aged between 18 and 45 are increasingly turning to social media to find out about finance. The survey covered 1,000 consumers aged 18–45 who had invested in the past two years. Finfluencers play a key role as sources of investment information, and platforms such as YouTube and Instagram are particularly popular among the 1,000 survey respondents. More than half of investors from Generations Y and Z (see info box) consider social media to be a reliable source of information about finance, and 60 percent even consider it a good alternative to professional advice.

This is also reflected in investment habits: social media-savvy consumers have invested in more asset classes in the past two years, particularly equities and crypto assets, thereby diversifying their investments more broadly than those who do not use social media for researching financial topics.

Crypto assets growing in popularity

Generations Y and Z are looking for different things in the asset classes they choose. Gen Y tends to invest far more in asset classes like call and time deposits, while Gen Z has a slight lead in crypto investments and precious metals (see infographic).

Infographic 1: Investment behaviour

[Infographic 1: Investment behaviour]
Source: BaFin

Crypto assets are far more widespread in portfolios than they were in 2022, with 32 percent of respondents having invested in them in the past two years. A survey by the Organisation for Economic Cooperation and Development (OECD) two years ago, which BaFin coordinated and analysed in Germany, found that just 5 percent of consumers aged 18–79 were investing in crypto assets. The figure for Gen Y and Gen Z in the OECD survey was 10 percent.

The BaFin survey also revealed a clear relationship between social media use and investing in crypto assets, with 43 percent of the social media users surveyed claiming to have invested in them. By contrast, the figure was just 25 percent for those not using social media.

Social media therefore plays a key role, particularly for crypto assets.

Finfluencers: shaping investment decisions

Finfluencers – influencers who give financial recommendations on social media – are a key source of information for many young investors, with more than 50 percent of respondents having received financial information from them at least once (see infographic). Almost 90 percent understood that finfluencers give investment recommendations, mostly in relation to equities or crypto assets.

The survey also revealed a high hit rate for finfluencer recommendations: 80 percent of those viewing investment recommendations from finfluencers are aware that they also provide a link to make the investment, with 57 percent of those investors buying the product directly via the link and a further 25 percent buying it elsewhere.

Infographic 2: How finfluencers impact investment behaviour

[Infographic 2: How finfluencers impact investment behaviour]
Source: BaFin

Lack of awareness of paid content

As things currently stand, finfluencers do not always have to disclose who paid for their recommendations and how much they earn from commissions and other sources. In addition, many young investors (a total of 37 percent of those surveyed) are completely unaware that finfluencers routinely receive payment for their recommendations. Of those who purchased a financial product via a finfluencer’s link, 15 percent did not know that finfluencers are generally paid for their recommendations.

The BaFin survey also revealed that young investors want better protection overall against dubious investment recommendations on the Internet.

BaFin’s website offers extensive information on the topic of online investment fraud , including specific tips on how to protect yourself from suspicious offers and what to do in cases of fraud.