The Rise of Financial Influencers and the Question of Trust
Social media platforms are currently flooded with creators offering guidance on where and how to invest your money. This phenomenon coincides with stock market volatility and Chancellor Rachel Reeves encouraging savers to invest in shares. Journalist Lydia Spencer-Elliott examines who to trust in this crowded space and how to identify potential red flags.
The Personal Journey into Finfluencer Territory
Many individuals, particularly those with humanities backgrounds, have traditionally viewed finance as an impenetrable world of jargon and unpredictability. For years, savings might languish in accounts offering minimal interest, until the algorithm of platforms like TikTok introduces them to financial influencers, or "finfluencers." These creators, often young and relatable, present investment strategies in accessible language from their bedrooms rather than city boardrooms.
This approach resonates deeply. A recent survey reveals over seven million people have followed financial advice from online personalities, with 1.9 million failing to verify the creator's qualifications. Among Generation Z, this trend intensifies, with 75 percent seeking financial guidance online according to Credit Karma data.
The Academic Perspective on Popular Expertise
Professor Andreas Lindegaard Gregersen of Copenhagen University, who studies finfluencer strategies, notes the shift from traditional experts to relatable figures who simplify complex topics. "The popular expert isn't some hoity-toity ivory tower academic," he observes. "It's a person who can speak at large about complicated things in layman's terms."
He draws parallels to celebrity chefs discussing nutrition, but highlights a crucial difference: "If I look up a new chicken recipe and don't like it, that's fine. I can try again. But with finance, you've lost real money and now have to recoup."
The Cultural and Economic Context
The finfluencer boom reflects broader cultural and economic currents. With 3.7 million posts under #investing and 24 million under #money on TikTok alone, content creators in this niche experience rapid follower growth. During financially precarious times marked by geopolitical tensions and rising costs, people naturally seek ways to increase their resources.
Finance permeates contemporary culture through algorithms, television dramas like Industry, and even dating preferences. Historian Amy Edwards, author of Are We Rich Yet? The Rise of Mass Investment Culture in Contemporary Britain, explains: "There is so much that gets us invested, literally, in this particular political economy that we have."
She notes how media representations, whether celebratory or satirical, increase public awareness and desire to participate in financial success stories.
Diversifying the Face of Finance
Historically dominated by white men, the finance industry sees demographics shifting among influencers. While March 2024 data shows three-quarters of certified financial planner professionals are male and over 82 percent white, financial influencers are more likely to be women or people of color.
Research by economic sociologist Adam Hayes finds influencer messaging explicitly promotes diversity through language and topic selection. Former financial adviser turned influencer Zoe Burt noticed her traditional client base was "frankly pale, stale and male," prompting her to create content specifically designed to help women invest, addressing disparities in financial literacy where women are twice as likely to have poor understanding according to one March study.
Government Endorsement and Market Realities
The current push for public investment echoes the 1980s when Margaret Thatcher's government sold nationalized industries to private investors. Today, Chancellor Rachel Reeves encourages Britons to invest in shares for better returns, supporting both individuals and UK businesses. However, markets have recently traded down due to Middle East tensions, oil supply concerns, and inflation fears, reminding investors of inherent risks.
Edwards cautions that while financial literacy is valuable, it alone cannot address inequality. Reflecting on the 1980s experience, she notes: "There wasn't enough infrastructure, or support, or education that meant people felt confident in investing, creating a diverse portfolio." Many shares eventually returned to institutional investors, reinforcing existing market structures.
Identifying Red Flags and Seeking Reliable Guidance
Professor Gregersen warns against influencers promoting "frontrunner tips" about markets, noting that genuine insiders would typically keep such information private. Another red flag involves "bespoke trading systems" coupled with mentorship offers to leave traditional employment, which he describes as "a sort of finance multi-level marketing scheme."
The Financial Conduct Authority (FCA) has expressed concern about misleading advice from influencers with "little knowledge of what they're promoting." They note a high rate of non-compliant promotions risking poor-quality information dissemination. However, the FCA acknowledges legitimate finfluencers can provide useful advice and is developing new guidance for creators who want to operate responsibly.
Internationally, China's Cyberspace Administration has banned influencers without relevant degrees from discussing finance, health, or law topics online to combat fraud. While no similar sweeping measures are planned in the UK, the FCA recommends using their Firm Checker tool to verify authorization and avoid scams.
As the landscape evolves, the consensus among experts emphasizes long-term investment strategies over get-rich-quick schemes, thorough verification of influencer credentials, and cautious engagement with financial content online. The democratization of financial advice brings both opportunities and risks that require informed navigation.
