Influencers and the rise of FinTok

I came across this rather interesting article over the weekend:

It seems the article takes a dramatic U-turn at the end, so I’m guessing that the news about TikTok banning branded financial service content came after having done much of the research and writing :slight_smile:

However, it raises many interesting issues, chief among them in my mind being: how do you reach young people to give them useful financial education, while protecting them (and the wider community) from fraudsters and manipulation?

(oh, and the distinctly not-on-trend use of “cash” in the headline instead of money - I’m guessing the sub-editor is not the most fintech-savvy)

Will it further glamourise risky trends (e.g. crypto, free share trading, etc.)? Or are we finally speaking to younger consumers in a language and context they care about?

What do you think of the rise of FinTok and influencers in the financial space aimed at young people, even those under 18?

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I think - rightly or wrongly - brands have to go where their possible customers are (assuming this is possible…). The fraudsters are there already after all.

This of course creates a very blurred line between advice and information which is particularly problematic for investing.

I don’t think everything should be regulated - fake news / misinformation however require us all to level up our critical thinking and willingness to listen to others. We can only hope that if there’s good information on a platform that people will find it.

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I’m interested in exploring some ways to assist with this process. I do agree that regulation (i.e. punishing the bad) is complicated, so maybe we can (collectively?) do more to promote the ‘good’?

I’m sceptical about the usefulness or even the intention of those so called influencers. They are often backed by someone else who has financial interest in it. The backers no doubt will need to make a profit from it, and the only question is “how”. A few ideas come to my mind while I’m typing:

  1. play the unregulated market, e.g.: pump & dump, this applies to cryptos with smaller market cap
  2. advertise or even glorify expensive non-mainstream trading platforms, of which they are shareholders and/or creditors
  3. lure people to trade exotic OTC products (spread betting, CFDs, etc.) on certain platforms, and then same as above
  4. paid for additional services/products, e.g.: “advise” - which is bull****, because they aren’t qualified FAs

The end result? Young people get burned in the world of (fake) investments, and as a result of that, become too risk averse and lose out in the long run.

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The Guardian has published a new article

As ‘finfluencers’ spread through social media, beware the pitfalls
YouTube, Instagram and TikTok are full of finance ‘experts’ promising riches to the young and credulous

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all seems very reasonable advice - and not sure it is limited to TikTok - but these ‘finfluencers’ (urgh) can get popular very quickly.

in the end, it is good that financial awareness spreads, even if it is because you need it to protect yourself from fraud and scams first,

:+1: completely agree

Hmm… following up on this topic, Martin Lewis from MoneySavingExpert has recently become a “finfluencer” on “FinTok”, here’s the link: TikTok

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Hey, if you can’t beat 'em, join 'em!