Watch Your Step

In today’s world, where almost everything is just a scroll and click away, financial advice has found a home on social media. From TikTok to Instagram, and YouTube to Twitter (or X), financial influencers – or “finfluencers” – are using their platforms to share insights about saving, investing and budgeting.

Lately, it appears as though the new year has brought the chance to turn over a new leaf and manage one’s finances better. But with this rise, comes a mix of opportunities and challenges. Let’s explore the good, the bad and the downright ugly of this growing trend.

The good

Social media has made financial literacy accessible to millions. Finfluencers often break down complex topics like investing, credit scores and retirement planning into bite-sized, relatable content. They use storytelling, visual aids and even humour to make traditionally dry topics engaging. For those who may not have access to formal financial education, this democratisation of knowledge can be life-changing.

Take TikTok, where creators can explain concepts like the Rule of 72 or how to build a budget in under a minute. These platforms are especially popular among younger audiences, sparking financial curiosity early.

For women, who have historically been underserved by traditional financial services, this new wave of content can foster empowerment and confidence.

The bad

While financial advice in 60-second reels or posts can be engaging, it’s often oversimplified. Finances are deeply personal, and what works for one person might not work for another. Blanket statements like “Invest in this stock” or “Cut out coffee to save for a house” can mislead people into thinking there’s a one size fits all solution.

Another issue? The lack of regulation. Unlike licensed financial advisors, many finfluencers aren’t required to follow strict compliance rules. This meanstheir advice might not be accurate or even ethical. Without the proper research or context, followers could make decisions than harm their financial well-being.

I personally have been following some financial influencers and am quite appalled at how they oversimplify and categorise the risks of certain investments.

The ugly

Where there’s opportunity, there are opportunists. The rise of finfluencers has also brought about a surge in scams and misleading information. From pump-and-dump crypto schemes to fake giveaways, some influencers prey on their audience’s trust and lack of financial knowledge.

Even well-meaning influencers can spread harmful advice if they don’t fully understand what they’re promoting. For example, encouraging followers to “get rich quick” through day trading or unverified investments can lead to significant losses. The line between genuine education and harmful misinformation is often blurred.

Navigating safely

So, how can you make the most of financial influencers without falling into the traps? Here are some tips:

• Do your research: Before acting on advice, cross-check it with reliable sources. Look for influencers who cite credible references and explain the nuances of their advice.
• Beware of red flags: Be cautious of anyone promising guaranteed returns or promoting high-risk investments without discussing the downsides.
• Follow licensed professionals: Whenever possible, prioritise content from certified financial planners or advisers with proven credentials.
• Tailor advice to your situation: Remember, personal finance is just that – personal. Use social media as a starting point, but consult a professional for tailored advice.
• Be wary of sponsored content: Many a time I have noticed that finfluencers do a sponsored content for a business, be it a property developer or a trading platform. This is where you need to exercise caution and practise caveat emptor that is buyer beware.

Final thoughts

Finfluencers have changed the way we approach money, making financial education more accessible and engaging. But with this change comes the need for vigilance.

By approaching the finfluencer space with a critical eye, you can harness the good while steering clear of the bad and ugly. With anything in life, questioning what you read and hear is a good thing so you don’t fall into the trap of following the herd and losing your hard earned money.

As women, let’s use these platforms as a springboard to deepen our financial confidence, but never forget – your financial journey is yours alone. Let’s keep learning, questioning and growing!