Financial influencers, also known as finfluencers are becoming more prominent on social media. This means serial scrollers are now engaging with and actively using this stream of financial advice in their day-to-day lives.
In the 21st century, we rely a lot on influencers’ opinions and recommendations to help form our own. That reliance has now moved into the financial sector, and you won’t be browsing for long before coming across financial advice on your favourite platforms, like Instagram and TikTok.
Income Group’s Marketing Assistant, Alice, reached out to Ola, a finfluencer and the founder of @AllThingsMoney to get her take on the finfluencer space.
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Having already built an impressive following of over 16K on Instagram by posting relatable financial content, Ola’s content can be found on her website, alongside her Instagram, Twitter, TikTok and LinkedIn accounts.
Alice: Hi Ola thanks for speaking with us – what are your thoughts on the finfluencer trend?
Ola: “I think it’s great to see so many people now sharing personal finance tips and tricks online. As we are taught so little at school and university about key financial topics, I think it’s great that people are sharing useful information online. However, there are sadly people that do take advantage of this by sharing false / damaging information, so it’s important that people consuming this content still carry out their own due diligence!”
How much impact can a finfluencer have?
Financial influencers can have a significant impact on their followers or those who view their content. These creators use social media platforms, blogs and other forms of digital communication to share their thoughts and opinions on financial topics and products, and their followers may take these opinions into consideration when making their own financial decisions.
Because of their growing popularity, finfluencers are facing potential regulations on their content. The UK financial watchdog proposed steps to regulate the online promotion of high-risk investments.
In a world where you are not taught the everyday aspects of finance at school, such as paying taxes or what you need for a mortgage, you could argue that finfluencers becoming more popular on social media is giving the younger generation an opportunity to learn about the essential financial tips they’ll need later in life.
Why are we turning to finfluencers?
It is thought that more people are turning to finfluencers as the cost-of-living crisis worsens. People are looking and hoping for free advice to help them in these desperate times.
So, what could be easier than a quick scroll through your social media timeline to make relatable and authentic advice appear in front of your eyes?
Currently, the hashtag #FinTok on TikTok has over 2 billion views. #cryptocurrency has over 8 billion views, and #investing over 10 billion. On Instagram, #financialfreedom appears in more than 11 million posts and #investing in more than 13 million. These statistics go to show how this unlikely influencer is starting to enter the mainstream world.
The instant, direct and informal way of communication that social media provides makes finfluencers accessible to a wider audience. They can interact with people they might not have been able to reach with traditional media.
By using social media, finfluencers are also able to communicate with a specific, niche audience in a different way to the typical jargon-heavy voice found in traditional financial media.
Alice: Ola, why do you think so many people are turning to finfluencers for financial advice and guidance?
Ola: “I think it’s because there is so much information about personal finances online that it can often be overwhelming, and the jargon used can also make things a lot more confusing than it needs to be. Finfluencers do a great job at breaking down difficult topics in a relatable, and easy to digest way which is why I believe so many people are now turning to them!”
What regulations will finfluencers face?
With finfluencer popularity on the rise, the Financial Conduct Authority (FCA) has said that they are considering putting regulations in place for those trying to share financial advice online.
The UK’s FCA is warning that they intend to crack down on influencers that don’t warn their followers or clients about the risks they take when investing.
Financial influencers may be subject to security laws, advertising rules, and other financial regulations related to advertising. For example, influencers must disclose any sponsored content and may be subject to truth-in-advertising laws, which prevent false or misleading claims in advertisements.
Alice: Ola, do you agree with the finfluencer regulations?
Ola: “To an extent yes, as many finfluencers online are not qualified to give ‘financial advice’ so I do think it’s important that there are regulations in place to help protect consumers of this online information.”
Alice: Do you think these regulations go far enough?
Ola: “I think financial regulations do go far enough. However, I think the main issue and responsibility lies with the platforms where the information is being shared. I think platforms such as Instagram, Twitter, and YouTube do not do a good enough job to protect the users of their platforms. Especially with the number of spam/clone accounts on the rise, these platforms need better process in place to make it easier to report these types of accounts.”
So, for easy-to-absorb financial advice be sure to pick up your phone and follow Ola!
But remember to be cautious, so for any big decisions, consider additional advice too.