By: Declan Sweeney, Experiential Programming & Outreach Coordinator (Financial Literacy)
Are finfluencers trustworthy?
As with any information shared on social media, when it comes to finfluencers, it’s important to think critically about the content and research the source the information is coming from.
Here are a few tips to check if a finfluencer is trustworthy.
Check their credentials:
- Do they have relevant education?
- Have they been certified? Examples: Chartered Professional Accountant, Chartered Financial Advisor (CFA), Certified Financial Planner (CFP). Find them on LinkedIn to confirm. You can also use this online check credentials tool.
- Do they have relevant professional experience?
Understand their underlying motivations:
- Is this finfluencer sponsored? Does it seem like they continuously bring up a product or company?
- Are they selling a course, or do they have a link that helps them make money off their followers?
- If they have sponsored content, do they clearly label it and not focus on financial advice during these videos?
Focus on the concepts and how they present the facts:
- Do they explain why what they are saying works?
- Do they focus on context over results?
- Do they acknowledge trade-offs or different perspectives?
- Do they encourage critical thinking on what they are discussing?
- Do they focus on long-term goals and planning over short-term gain?
Finfluencer red flags
“You can double your money in a short time-period.”
Why it’s a red flag: Promises of fast, high returns are either scams or require extreme risk. Examples may include options trading, crypto or “pump and dump” schemes (use of false or misleading information to drive stock prices up for quick profit).
“I did this, and it worked. You should, too!”
Why it’s a red flag: Personal experience should not always be the focus for widely disseminated advice. This advice often does not consider your personal factors.
“Everyone should buy this stock/ETF/crypto.”
Why it’s a red flag: Investment recommendations, especially without diversification, can lead to significant losses and emotional strain.
“Sign up for my course to learn why I succeed.”
Why it’s a red flag: If an influencer is trying to get you to purchase something without any details using a sales pitch, they are trying to get you to buy into the mystery and potential. Do not fall for this, as there are many credentialed courses available elsewhere which will provide more value.
“The banks don’t want you to do this.”
Why it’s a red flag: Putting distrust into institutions without offering regulated alternatives often leads to extremely risky or fraudulent financial options being put forward.
Final thoughts
Digital literacy is important to understand financial literacy. As finance has become demystified, finfluencers can be inspiring, but they are not always reliable. Use them to start the conversation but not as an absolute truth. When in doubt, get a second opinion from a Chartered Financial Advisor (CFA), Certified Financial Planner (CFP) or another trusted advisor.
Not sure where to start or need support? Mac’s Money Centre is here to support your financial literacy needs. Email money@mcmaster.ca to get started.