A bad finfluence on your socials? Skip getting swayed with these 5 tips

It’s easy to find yourself scrolling under the finfluence these days – getting swept up by social media influencers talking about money, investments, forex, crypto. What they offer can range anywhere between super-useful money hacks to outright scams.  

Who’s who on social? 

To be fair, there are a lot of good influencers sharing experiences and insights we can learn from. We’ve all had good teachers and bad ones – but how do we figure out who’s who? 

“There are finfluencers who put out some really great content, but there’s the other end of the spectrum and that’s what we’re most concerned about,” explains Samantha McGuire of the Financial Markets Authority. “You actually do have to be really careful about who and where you take guidance from.”  

“A good ‘finfluencer' should encourage critical thinking, not just blind trust,” says Keep the Change’s Luke Kemeys. “I focus on simplifying financial concepts without the gimmicks, and share lessons from my role as a chartered accountant, plus my many mistakes, which I’m open to discussing. 

“So no get-rich-quick schemes, just practical things to get people thinking for themselves.” 

Where do you place your trust? 

Ruth Henderson, aka the Happy Saver, has had her share of finfluencers ask for her help to promote them. “‘Can you shout my praises from the rooftops?’ they ask. Ninety-nine percent of the time, they just come and go,” she says.  

And when people have reached out to her for an opinion on a finfluencer? “Oh my gosh, run a mile!” she says she’s been known to tell people, after checking out the finfluencer in question. 

Turns out trusted, reliable finfluencers need to come from trusted, reliable referrals.  

Ask around widely 

Perhaps that’s the most important thing when you’re weighing up whether to follow guidance from an influencer: ask around first.  

“Throw it out there widely when you’re considering using finfluencer guidance,” says Sam at the FMA, for example on Reddit, Discord or Trustpilot. “There’s a high chance that others may have interacted previously and experienced it positively or negatively.” 

We’re all meant to help each other, after all. It’s a shame so many finfluencers aren’t on board with that. 

Things are too frequently not what they seem 

“I did it, so you can too.” The lure of a fantastic lifestyle is strong, with many a finfluencer urging us to copy their trading to achieve the same. But is that lifestyle real? It may not be funded by those trades they’re hyping, but by subscription fees instead. It’s impossible to tell. 

You know all those high approval ratings, large followings and positive reactions? They don’t necessarily point to expertise or credibility. 

Then there are all those promises of exceptional performance or guaranteed returns – as if the unknowable future were predictable. (It’s not.) 

Supposedly helpful information can be personalised advice in sheep’s clothing. For example, a video upskilling you on investing may be general and have a disclaimer, but sneakily give specific financial advice in the title: ‘Top 3 stocks to buy right now’.  

How could that finfluencer know enough about your goals, investments or risk profile to say those shares are for you? And what are the risks that come with those recommendations? If something is too good to be true, unfortunately, it probably is. 

The bottom line 

No finfluencer is allowed to give out individualised financial advice to their social following, like ‘Go buy shares in Tesla’. General, factual information is okay, but without knowing your specific needs, plans and situation, making a specific recommendation crosses the line. (Having a disclaimer doesn’t make it legal, either.)  

Social media feeds our herd mentality, lumps us together with the like-minded and gets us to make decisions based on what others are doing. It blindly confirms what we already believe and leaves out anything that contradicts.  

That’s great for selling, but ideally with money decisions, you want to take in all the available information and make a balanced, thoughtful choice. Try doing that in a feed...  

5 tips for when you’re under the finfluence

1. First, ask: what are they selling? 

The general model for finfluencers is to build an audience, capture your details, then sell you a product, book or course. The more it becomes about the sale, the less it is about you. If all their activity is just a funnel into their business, that’s a red flag for sure. 

2. When you see these words, flee. 

There are specific words that should be instant warning lights when you’re scrolling: ‘act now’ and ‘guaranteed’. Then there are all the ‘no risk to you’ words, like ‘limited risk’, ‘zero risk’ and ‘low risk’. And any time the word ‘risk’ is left out, you may as well swipe left. Investment returns always come with risk.  

3. Look for substance over hype. 

It helps to check whether a person has real experience, qualifications or a track record of actually helping people. If they’re just flashing the cash, sporting the bling and pushing some new crypto project, this will end badly. 

4. See if you can explain what they’re on about. 

You’ll hear influencers talking about an investment as if it’s very easy, but not providing a lot of details about what they’re promoting. Especially in the crypto space, where there’s heaps of malicious activity, if you struggle to put into words what product someone’s pushing, it’s time to exit – before you become their ‘exit liquidity’ (their early payout after pumping it up). 

5. Keep it Aotearoa local. 

We’re fortunate here in New Zealand that we don’t suffer as much from celebrity endorsements in the financial arena, but overseas, the big names bring big sales. If your feed features a lot of influencers from other countries, you’ll have limited rights or recourse if things go pear-shaped, as there are no dispute schemes or higher authorities like the FMA. The more local someone is, the more rights you’ll have.