Are finfluencers a reliable source of financial advice? Not always. Their social media posts are often engaging and can inspire people to learn more about finance or take action. But it’s important to think critically before following their advice blindly.

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What is a finfluencer?

An increasing amount of the content on social media is being posted by financial influencers, known as finfluencers. They use social media to discuss personal finance or investments, often with the goal of informing others, sharing their experience, generating income or simply raising their profile.

A finfluencer may be:

  • a financial professional
  • a regular, everyday person
  • a celebrity

Finfluencers strive to simplify financial concepts through engaging and entertaining content, which helps spark genuine interest in personal finance.

Wanting to stay informed is an excellent quality, but it is also important to stay vigilant. There is no guarantee that advice from a finfluencer, even a popular one, will be suited to your situation.

Following a finfluencer: What to look out for

A finfluencer may propose various types of content. Some types may actually help you better understand your personal finances, while others should be approached with caution.

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  • The finfluencer clearly explains technical concepts, such as RRSPs or stock market investing, without promising miracle solutions;
  • The finfluencer shares simple, practical tips to help you better manage your budget and avoid unnecessary debt;
  • The finfluencer clarifies the limits to their advice, qualifies their words and encourages their followers to seek the help of professionals;
  • The finfluencer clearly indicates if they are being paid to talk about a product or service.
  • The finfluencer promises quick or risk-free returns;
  • To attract followers, a finfluencer focuses mostly on their lifestyle or financial success as opposed to their qualifications;
  • The finfluencer avoids talking about the risks or does not qualify their words;
  • The finfluencer does not indicate whether they are being paid to promote a financial product.

In some cases, the finfluencer may be in a conflict of interest

For example, a finfluencer receiving renumeration for promoting a financial product but not telling their followers about it would be in a conflict of interest. It is therefore important to approach the content with a critical mindset, even if the content is useful or persuasive.

[Translate to English:] Image décorative : finfluenceur

Questions to ask yourself before putting your trust in a finfluencer

Before putting your trust in a finfluencer or registering for one of their courses, take a moment to reflect and sharpen your critical thinking skills.

Here are some key questions to ask yourself.

Why is the person sharing this content?

Does the finfluencer really want to help you better understand your finances or are they mostly looking to generate clicks, followers or sales? This could influence content quality and validity.

Is the finfluencer offering investment or personal finance courses?

Some finfluencers offer free or paid courses or webinars. Be careful, the price of a course does not necessarily reflect the quality of the course or the competence of the person leading it. Before you take a course, check the person's qualifications and credibility. Also, take the time to shop around: some recognized organizations may be offering equivalent training at a lower or even no cost..

Does the finfluencer have a financial interest in the product they are recommending?

Is the finfluencer being paid to promote an investment? If so, they must be transparent and mention this fact.

Is the finfluencer looking to generate enthusiasm for an investment they are holding so they can then sell it at a profit? If so, their interests may colour their recommendations. In certain cases, such practices are illegal.

Is the finfluencer promising high returns for no risk?

Beware of anyone promising high returns for no risk. Most investments carry some risk and usually the higher the potential return, the higher the risk. An offer may be accompanied by positive follower comments to get you to invest impulsively. Their purpose is to make you believe that, if you don’t invest, you’ll be alone in “missing out on a great opportunity.”

Is the finfluencer registered with the AMF?

To solicit investors, provide investment advice or use designations such as “financial planner,” a person must be registered with the AMF.

 

Warning

Be careful if the finfluencer focuses on their lifestyle or popularity to support their advice.

Apparent success does not guarantee information quality.

End of the warning

Critical thinking skills: Your best financial ally

Staying informed about your personal finances is an excellent habit. A finfluencer may sometimes help you better understand certain financial concepts. They may be good at explaining complex topics in simple terms, and the information and advice they provide may be relevant. However, it is essential to stay vigilant. Before you follow their advice or make an investment, take the time to ask yourself the right questions and check their information against trusted sources. Sharpening your critical thinking skills will help you protect your money.

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