6 February 2025
general
“Finfluencing” may be a relatively new phenomenon, but it’s certainly gaining traction.
A “finfluencer”, or financial influencer, is a social media personality that shares financial advice and information with their followers.
Many of those followers heed their advice. In fact, according to a recent survey by Young Money, reported in FTAdviser, 59% of young adults follow a finfluencer online. For young Londoners, this number rises to 74%. Of those, 77% said they trusted the advice given and 14% said they would act on it.
The Financial Conduct Authority (FCA) cracked down on this space in 2024, issuing 38 alerts for accounts with unlawful financial promotions. It also states that an increasing number of young people are falling victim to financial scams, which may be connected to the rise in finfluencing.
Whether consciously or not, finfluencers may be putting their followers' finances and livelihoods at risk. This highlights an acute need for unbiased and professional financial advice.
Though engaging with financial content on social media may be an interesting way to learn, and can make information more accessible, it’s not a substitute for a solid financial education or financial advice.
Here’s what you need to know about this trend, and why talking to an adviser may still be the more logical approach.
Finfluencers rose to prominence on TikTok and Instagram
Finfluencing is a trend that rose in popularity on a variety of social media platforms, but TikTok and Instagram are the most widespread. Penningtons Manches Cooper (PMC) states that the hashtag, #FinTok, which makes it easier to search for specific groups of influencers, had more than 4.7 billion views by July 2024.
Both apps offer a dynamic environment where short, engaging videos can easily reach millions of viewers. This can make it easier to disseminate digestible, albeit unregulated, financial information.
The content that you’ll find on these apps can also be incredibly diverse, ranging from:
This broad range of content attracts a diverse audience, particularly young people and first-time investors who are eager to learn about personal finance.
After all, many are entering their adult lives and the workforce with little financial education. According to the Money and Pensions Service, 3 in 4 teachers say that their students are leaving school or college without important financial skills.
So, it’s unsurprising that young people are looking for easy-to-digest financial education. After all, the finfluencing trend can increase accessibility to financial information, particularly to those who may not traditionally engage with other financial resources, such as books, articles, or advisers.
However, it’s crucial to approach finfluencer content with a critical eye.
The lack of regulation in the space means there’s no guarantee of qualifications or even expertise. The advice you receive on social media may be biased, particularly if the influencer is promoting a product or service.
Plus, it isn’t personalised to you, meaning following their tips might not be the best course of action for you and your family.
Relying on finfluencers could lead to misinformation and detrimental financial decisions
The fast-paced nature of social media platforms could incentivise finfluencers to prioritise entertainment and engagement over accuracy and nuance.
As such, finfluencing may lead to the dissemination of misleading or overly simplistic advice, such as encouraging risky investment strategies or promoting unrealistic expectations of financial returns.
In fact, in May 2024, the FCA began prosecuting nine individuals for providing unauthorised advice on Instagram. These individuals were offering advice on the buying and selling of contracts-for-difference (CFDs), a product that the FCA states at least 80% of investors lose money on.
Additionally, the expertise of any one finfluencer may be limited to personal experience or self-study, which may not be enough to provide sound and unbiased financial advice. Though the FCA is paying more attention to this space, there is still little oversight or regulation, so you may be vulnerable to potentially misleading or inaccurate information.
Coupled with Meta’s recent decision to remove third-party fact-checkers from its platforms, there’s an even greater risk of receiving incorrect information. This could make it more challenging for institutions like the FCA to identify false or misleading information, leading to an even riskier environment for consumers.
Building a solid foundation of financial literacy could be more constructive in the long term
While finfluencers can offer a glimpse into the world of personal finance and provide some entertaining insights, building a solid foundation of financial literacy using the expertise of qualified professionals is key.
Beyond that, financial literacy is about more than simply acquiring information. It involves critical thinking and decision-making skills. These are necessary to accurately evaluate financial information, identify potential risks and gains, and make sound judgements about your financial plan.
While finfluencers could offer an entry point for many, a financial planner may be better placed to offer support. They can offer personalised advice about the most appropriate routes to take for your personal circumstances and design tailored plans that account for both your short and long-term goals.
In today’s digital age, where information is readily available online but not always accurate, the importance of a solid foundation is key.
Get in touch
For qualified, regulated advice about your finances, feel free to get in touch with us.
Email enquiries@jesellars.co.uk or call 01934 875 919 to find out more about how we can help you.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
