The impact of ‘finfluencers’ on the financial advice sector

If you’ve been paying any attention to social media, you’ll already know that influencer marketing is big business. In fact, the global influencer marketing industry has tripled in value since 2019 and is expected to reach almost $25 billion by the end of 2024. 

We’ve been accustomed to online creators giving us tips, tricks and hacks for lots of different parts of our lives, from food and health to fashion and beauty. But more recently, we’ve seen the rise of influencers who are dishing out financial advice.

But what does this mean for people hoping to pursue a financial advice career and the future of the industry as a whole? In this blog post, we investigate this issue in detail. 

What is a ‘finfluencer’?

The term ‘finfluencer’ was coined to describe social media personalities that provide advice and information on a wide range of finance-related topics, including spending, saving, investing and cryptocurrency. In many cases, brands pay them to promote financial products and services to their followers.

The number of finfluencers has been increasing in recent years and so have their followings. Between April 2023 and April 2024, financial influencers accounts on Instagram saw a median follower increase of 6%. Meanwhile, other influencer categories saw a growth rate half this size (3%). 

The good: What are the benefits of finance influencers?

On the bright side, many online accounts that provide financial advice say they are promoting financial literacy and making saving and investment opportunities more accessible to wider audiences. They do this by breaking difficult financial concepts down into bite-sized chunks in engaging and relatable ways. Think witty, sound-bite laden TikToks. 

Indeed, finfluencers are often touted as helping people to take back control of their finances and live more financially-secure lives. And it seems that every finance influencer has their niche. Some accounts exploit the wellness trend by making a link between financial health and mental wellbeing. Other so-called ‘deinfluencers’ focus on pushing back on the rising tide of consumerism by encouraging users to spend less. This type of content can also overlap with environmental content that appeals to a growing number of eco-conscious consumers. 

The bad: What are the risks?

On the darker side, anyone can set themselves up as a finance influencer online. While some finfluencer profiles are run by highly qualified and knowledgeable individuals, others are not. And it can be hard for everyday social media users to tell the difference. 

Of course, many people who create finance content have their hearts in the right place and believe that they are democratising information and helping people to learn from their own experiences. However, there’s simply no guarantee that the advice they’re offering is sound.  

Unlike qualified financial advisers who will have undertaken courses such as the DipFA Training & Qualification Course, some financial influencers lack any relevant qualifications. 

On top of that, it’s important to recognise that there isn’t always a one-size-fits-all solution when it comes to finances. While there may be some golden rules that are likely to benefit everyone, the right financial strategy, products and services will vary from person to person. This means that there’s a real danger that the financial product or cryptocurrency an influencer is raving about might be exactly what you don’t need. 

While it may be tempting to get free advice online rather than paying for the services of a legitimate financial adviser, if people don’t do their due diligence, there’s a significant risk they could end up in a worse financial position than they started out in.

The ugly: Unlawful practices

On an even darker note, some online personalities prey on vulnerable people and market products and services illegally. The finfluencing phenomenon has attracted a lot of scrutiny from the Financial Conduct Authority (FCA) in recent times. Back in October 2024, the watchdog interviewed 20 social media influencers under caution who were suspected of touting foreign exchange and contracts for difference (CFD). The FCA also published 38 alerts on its warnings page against social media accounts operated by influencers that may be promoting financial products and services unlawfully. 

Furthermore, the FCA has taken action against nine individuals and influencers for promoting an unauthorised trading scheme.

The FCA says that young people are increasingly falling victim to finfluencer’s scams. According to the watchdog, 9 in 10 young social media followers (between the ages of 18 and 29) have been encouraged to change their financial behaviour due to online influencers. In addition, a 2023 study by Forbes showed that almost 80% of young adults now turn to social media platforms for financial advice. 

The future 

So where does this leave the financial advice sector? Well, with so many people going online to find financial advice, it’s clear that this new player in the market cannot be ignored. 

But does this mean that the role of financial adviser will become redundant? Far from it. In fact, because of the murky nature of finfluencing, we think it’s more important than ever that people know where to turn when they need reliable and transparent financial information. 

With that in mind, it’s becoming increasingly necessary for financial advisers to get to grips with the kinds of content that clients may face in order to help them to navigate their way through it and avoid the pitfalls. 

Some financial advisers may choose to participate in social media to help educate clients, prospects and the public on the importance of accessing regulated, qualified financial advice. Your skills, knowledge and experience as a qualified financial adviser could help to set you apart from other influencers and ensure more trustworthy advice is available in the public domain. 

Having a social media presence isn’t a purely altruistic move either. In fact, social media has become a go-to marketing tool for many financial advisers and with good reason. A survey by Putnum Investments found that 92% of financial advisors on social media get more clients on the platforms they use to promote their businesses. 

Whether you choose to dip your toes in the waters of social media or dive in head-first, it’s clear that these platforms play an increasingly important role in the financial advice sector. Ignore them at your peril.