Financial influencers – the pros and cons

Financial influencers can amass many views with content covering everything from budgeting and debt to tackling taxes. Their videos may raise awareness of managing personal finances, but depending on who's making the content, it may not be wise to take their advice at face value. We look at the pros and cons.

News travels fast on social media, so people think this is a good way to share tips, including financial ones. It’s a growing trend, with hashtags like #stocktok and #PersonalFinance generating thousands of views, giving the ‘finfluencers’ behind them plenty of followers.

Financial influencers – the pros

• Finfluencers can have a knack for making complex financial concepts seem easy to understand. They use catchy videos, memes and real-life examples to explain everything from budgeting to investing.
• Traditional financial advice often costs money and could feel intimidating. Finfluencers offer free information that’s just a click away. This makes financial education accessible to everyone, regardless of their background or income.
• Seeing someone your age managing their finances could be motivating. Finfluencers often share their personal stories of financial success, which could encourage you to take control of your own money journey.
• Many finfluencers create a sense of community among their followers. You could join discussions, ask questions and share your own experiences. It could feel like a support group for your financial goals.

Financial influencers – the cons

The drawbacks of finfluencers' content probably outweigh the benefits, so don’t take everything you see as official advice:

• Not all finfluencers have formal financial education or certifications. Some might share tips based on their own experiences, which are unlikely to apply to everyone. Always do your own research and verify the information.
• Most financial influencers are not regulated by the Financial Conduct Authority (FCA) and may not entirely understand what they’re promoting. Because social media is vast and fast-moving, it’s very challenging to police, so misinformation could be visible before moderators have reviewed and then removed it. By this time, it could be too late for those who may have acted on any bad information.
• Personal finance can be complex, and short social media posts might oversimplify important details. Digging deeper and seeking professional advice before making any major financial decisions is crucial. Many finfluencers aim their content at the American market, which has different rules and regulations than the UK.
• While there’s a lot of helpful information online, there are also many misleading recommendations, which could hurt your pocket or leave you vulnerable to scams. Some finfluencers promote risky investments or get-rich-quick schemes that could lead to financial losses with no way of getting your money back.
• Hidden agendas. Finfluencers often make money through sponsored posts and affiliate marketing. This means they might promote products or services that aren’t necessarily in your best interest. Be wary of tips that seem like a hard sell.
• No authority. Is the online finfluencer well known or established? Does the FCA regulate them? Do some research into the person's background, motives and how others rate them. If they aren’t regulated, then you probably won’t be covered by any form of protection (like the Financial Ombudsman Service), if you act on a recommendation but lose out financially.

It’s essential to approach financial advice on social media with a critical eye. Always cross-check information, seek advice from multiple sources and consider speaking to a qualified financial adviser for more personalised advice. Although this may cost money, you may consider it worthwhile, compared to the risk of losing more money by following a finfluencer's advice. Your financial future is too important to leave to chance.

If you think you might be the victim of a scam or fraud involving any of your Chase accounts, please contact us right away.