Social media has been a big part of our social landscape in recent years.
We’ve gone from being influenced by newspaper articles and neighbourhood chats, to being swayed by catchy bite-sized content from Tik Tok, Facebook, X, Threads and Instagram. Going beyond just influencing aesthetic and lifestyle choices, the content we’re consuming has now started to influence on more serious aspects of our lives.
The rise of the ‘finfluencer’
Recent major global events, like the COVID pandemic, rise in inflation and subsequent economic fallout, has seen the rise of a specific type of social influencer – the ‘finfluencer’. These are people who use social media to provide financial tips and tricks using a variety of quick content, such as short videos and infographics.
While many ‘finfluencers’ are merely trying to even the playing field, financial professionals and institutions warn of bad actors with less-than-ethical motives. So, we’ve provided some information worth considering when scrolling through ‘finfluencer’ content.
How they can help
At its core, the prevalence of ‘finfluencers’ highlights a gap in the financial advice market as many people, especially younger audiences, turn to them for free, accessible and easy-to-digest financial information. For those who cannot afford professional financial advice, they may also turn to ‘finfluencers’ for help to better understand complicated financial concepts and in making financial decisions. The issue, however, arises when ‘finfluencers’ provide advice that they are not qualified or authorised to give, is without proper context to fit your specific situation, or worse, skew their advice (and the financial products they market) to benefit their own monetary agenda.
How they can hurt
Financial professionals and institutions alike warn against basing your financial strategies on information received from unlicensed ‘finfluencers’. At its best, the information is generic and is not tailored to your specific situation or goals. At its worst, ‘finfluencers’ may participate in ‘pump and dump’ schemes where they attempt to artificially inflate the price of a stock or cryptocurrency by encouraging their followers to invest.
The situation has gotten so prevalent that the FMA and ASIC have released guidelines making it clear that unlicensed ‘finfluencers’ could face penalties if they breach local laws.
What you can do
While consuming a variety of content is generally a good idea, if you choose to follow ‘finfluencers’ online, here are some tips to remember:
- Ensure that the content that you are watching is local – ‘finfluencers’ could be based overseas where the laws and regulations might be different.
- Do your research after watching the content to ensure that the advice is appropriate for your financial wellbeing.
Remember, you can also speak to a financial adviser who can tailor advice and strategies to suit your lifestyles and goals.
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Important information
Resolution Life Australasia Limited (Resolution Life) ABN 84 079 300 379, AFSL No. 233671 in Australia and NZ Company No. 281363 are the issuer of this article in Australia and New Zealand.
Any advice in this article is provided by Resolution Life and is general advice and does not take into account your objectives, financial situation or needs. Therefore, before acting on this advice, you should consider the appropriateness of the advice having regard to your objectives, financial situation and needs, as well as the relevant product disclosure statement and/or policy document, available from Resolution Life in Australia at resolutionlife.com.au or by calling 133 731, or in New Zealand at resolutionlife.co.nz or by calling 0800 808 267, before making a decision about the product.
Resolution Life is part of the Resolution Life Group and can be contacted via Contact us - Resolution Life (Australia) or Contact us - Resolution Life (New Zealand).
