Do you get advice from finfluencers?

Many of us turn to Instagram, TikTok and YouTube influencers for inspiration on everything from clothes to interior design. 

But did you know that lots of people - young adults in particular - are also heading to social media for financial advice? 

On the face of it, you might think that’s a good thing. 

After all, it shows that people are engaged with their finances, keen to be proactive and wanting to make the right financial choices. 

But there’s an important catch.  
 
Financial influencers - or finfluencers - aren’t regulated financial professionals, and that means that if you act on their advice, you have no legal protections.

When you get advice from a regulated financial adviser, they’re legally required to follow strict rules and standards set by the Financial Conduct Authority (FCA). 

That means they must give advice that’s genuinely in your best interests and appropriate to your specific situation. 

And if, heaven forbid, you’re not happy with the service you’ve received, you can file a complaint or even escalate the matter to the Financial Ombudsman Service. 

But with finfluencers, it's a completely different story.  

Since they aren't bound by these same regulations, there’s no obligation for them to fact-check their content, verify the products they promote, or act in your best interests. 

So if you follow their advice and you suffer financial loss, make a bad investment or fall for a scam, there’s nothing you can do about it. 

According to the FCA, 62% of 18 to 29-year-olds are following finfluencers on social media. 

Interestingly, three-quarters of these people say they trust their advice, and nine in ten followers say they’ve been encouraged to change their financial behaviour. 

At the same, the FCA has seen more and more young people falling victim to financial scams, and it believes finfluencers are partly responsible, as some are touting financial services products illegally. 

“Finfluencers are trusted by the people who follow them, often young and potentially vulnerable people attracted to the lifestyle they flaunt,” said Steve Smart of the FCA. 

“Finfluencers need to check the products they promote to ensure they are not breaking the law and putting their followers' livelihoods and life savings at risk.”

Social media can be a great source of inspiration in so many areas, but when it comes to your money, you must approach any advice with caution.

So if you want to be sure you’re making safe financial decisions, you should always: 

Check for FCA accreditation: Before acting on financial advice, verify whether the individual or company promoting it is regulated by the FCA. You can search the FCA’s register to see if a financial adviser or firm is authorised. 

Do your own research: If a finfluencer suggests a financial product, look for credible sources and reviews away from social media. 

Be wary of high-risk investments: Many finfluencers promote high-risk financial products like cryptocurrencies or forex trading. These can lead to massive losses, so don’t jump into any investments just because they’re trendy or promise quick returns. 

The watchdog is now seeking to tackle this problem by carrying out targeted action against social media personalities giving financial advice. 

This includes interviewing 20 finfluencers under caution and issuing 38 alerts against social media accounts that may contain unlawful promotions. 

The message is clear: financial advice should come from trusted, regulated sources, not social media personalities with questionable expertise. 

Having loads of followers doesn’t mean a thing if they’re not qualified and subject to FCA rules and standards. 

So don’t take what finfluencers say at face value.