Finfluencer? Yikes...

Okay, I’ll come right out and admit to being a little out of touch with the reality of social media. My (now young adult) kids sometimes chide me for this. I use Facebook only superficially. I’ve watched a few videos from a singer/songwriter I like on Instagram. And of course I’ll watch stuff on YouTube, but I don’t really surf around and I don’t follow anybody.

I also don’t use Twitter (I refuse to call it “X”). I tried some years ago but quickly gave up. Since I’m self-employed and thankfully not looking for a job I also don’t use LinkedIn much. And I’m certainly not on TikTok. I’ve tried a couple of times but TikTok’s format and explosion of short videos just isn’t my cup of tea.

That said, I do read about what’s happening on TikTok and the rise of “finfluencers” offering quick and casual videos about personal finance. It’s troubling or at least unsettling. Some of these people have millions of followers and pull down $100,000, even $300,000 a year, sometimes much more. They do this indirectly through paid ads within their TikTok, Instagram, and YouTube videos via algorithms at Google, brand sponsorships, and by directly selling products.

I’m sure that structure isn’t news to you because it isn’t to me, but what I don’t appreciate is the lack of disclosure on all this stuff when it comes to people providing financial advice, education, or whatever they might choose to call it. I want people, and especially younger people, to get educated about how the financial world works. Personal finance isn’t taught in schools very much anymore, so people need to get the information wherever they can and that’s fine. However, I question how much value can be found in videos lasting a minute or two. Granted, some of these link to longer videos on YouTube, but how many people make it that far?

After reading more about this in recent days I spent some time looking at finfluencer content on TikTok and was reminded of just how scattershot the information is. It’s also really hard to locate meaningful disclosure about the finfluener’s credentials and how they’re paid. It was also interesting to see the fluid nature with which content creators move between providing information and infomercial. At times it seemed like the sales pitch was more natural than the primary content and I wondered how much the person actually knew about the topic. I mean, these days you can just ask ChatGPT and pretend to know a bunch of stuff.

For example, one creator extolled the virtues of a credit card as part of a life hack process while leaving out a bunch of fine print. I understand adding more detail would make the video too long, but he left out quite a bit. The viewer was then directed to a list of favored cards below which linked to an affiliate program, which eventually linked to the credit card company and the relevant details. Does the viewer have any recourse against the finfluencer for providing incomplete or otherwise bad information? Was the credit card being touted actually “the best right now” for the viewer or the finfluencer?

Now, I don’t want to seem overly stodgy. People need to learn and the end can justify the means, I get that. Many of these creators are well-intentioned and their content is often interesting. If it’s sometimes a little basic and lacking in detail or risky to apply in the real world, maybe we can blame the short-form nature of the delivery platform. Or maybe it’s the short attention span of the viewer – which came first, I’m not sure. Either way, the result is something that’s common in my industry: often inexperienced people providing advice that’s really just a sales pitch.

So the main issue I have with finfluencers today is a lack of disclosure that would lift the veil, at least a little, on why they chose to discuss topics, if they have any expertise or training in the topic, and how they stand to benefit. I have to do this in my work. I have to tell you my background, training, and if I’m selling you something. I have to stay current with contuing education requirements. I have to tell you who my regulator is. And I have to tell you about conflicts of interest that impact our work together. I don’t see why finfluencers, who often provide advice with real-world consequences, don’t need to disclose similar information. Some do and that’s great, but most don’t. This is unfortunate because upgrading the professionalism of these folks would probably benefit a lot of people.

If you’re interested, here’s a great video on this topic from the CFA Institute. There are a few different things on this page so scroll down to the video from Richard Coffin.

https://rpc.cfainstitute.org/en/research/reports/2024/finfluencer-appeal

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