The new online Finance Influencer… nicknamed ‘Finfluencers’

What are Finfluencers?

Finance influencers – aka finfluencers, are making finance cool for younger generations.

Youngsters are using TikTok, Instagram, and YouTube as a way to learn about personal finance, turning to a rising class of financial influencers for guidance.

Depending on where you look on social media, making money seems to be straightforward. Learning how to buy a property in the UK with no money, or getting the basics of being a day trader in 30 minutes, are both lessons on YouTube, along with a lots of advice on how to earn from crypto currency. Meanwhile ‘finfluencers’, with varying degrees of knowledge, have blossomed on Instagram and TikTok especilly during lockdown and the pandemic in general.

What to look out for

With a large amount of advice across social media, it is worth keeping some core rules when deciding what is worthwhile and what is not. Here are some things to look out for:

• Who are they? You don’t have to be regulated to set up as a finfluencer on social media. Nor do you need any knowledge, skills or experience. So approach personalities with a healthy degree of scepticism.
• Popularity does not equal success. Just because a video has 100,000 views does not mean it is advice worth following. If there are some you think are valid, use the videos as a jumping-off point to do your own research.
• It is always safest to assume that someone is not an expert unless proven otherwise. The lack of regulation means that people can say whatever they want about any topic, from buy-to-let to bitcoin.
• It’s not all about getting rich quick. Big rises will always catch the eye – spikes in cryptocurrency being a particular example. But getting returns slowly, over time, while it may appear boring, can also transform your life over a few years.
• It is important to have all the information at hand in order to make investment decisions, especially when someone may suggest that they have a surefire way to make money quickly. It may not be that the finfluencer is trying to deceive, simply that there is not enough space in the video to tell the full story – or they may not be well enough informed.
• Make sure you have the full picture. If someone tells you they made 50% on a bitcoin investment in the last month, that would be true. But it is also the case the price of the cryptocurrency has dropped by almost a third in the last four months.
• Don’t depend on people who you think are just like you. There are many ordinary consumers who share their experiences of saving and investing. Focus on how good the advice is, rather than any shared history.