Customers today, especially from the millennial and Gen Z generations, often prefer to get product advice from friends, people they can relate to, and influencers on social media rather than brands. Financial advice can be a tricky subject, as qualified advisors go through years of training and often charge high rates. It’s easy to see how working with untrained online personalities could be a problem.  

Over the last few years, financial topics like budget management and debt have become bigger talking points on social media and so are the investment hashtags like #stock and #crypto.

Who is a Finfluencer and why are they growing in popularity?

New financial influencers (or “finfluencers”) have grown in popularity along with trending topics like cryptocurrency. The term covers any influencer whose main topic is money management. That includes those talking about managing personal finances, as well as investment-focused influencers.

Finance influencers have grown across social media platforms like TikTok, Twitter, and Instagram. Some have managed to attract millions of followers. They’ve built up an engaged audience of social users, typically under 40 years old, the same way that brands often do.

Gen-z and Millennial Investors

As the millennial and Gen Z audiences mature, their spending power as investors is growing. At the same time, economic pressures mean that money management and finance are now important topics for this audience.

The fact is that these groups get their product advice from social media, and they may prefer to follow personalities rather than brands or finance companies. So, you can see why financial services should be considering influencer marketing as part of their digital strategy.

Trust and Public Accountability

As social media use has grown, so has the potential for scams and fraud. Social media was listed as the initial form of contact for 27% of fraud reports in 2021. This has left users who rely on social media looking for verified and trusted sources of financial information.

But this hasn’t slowed the growth of financial influencers. In fact, it seems to have accelerated the success of finfluencers with a large following and a track record of good advice. Social signals have proven to be a strong influence on younger audiences’ trust.

Social media platforms like TikTok and Instagram have an investment in keeping scammers off their apps, too. Their reputations depend on accountability and authenticity, so algorithms and verification methods are developing all the time.

Can Finfluencers Give Reliable Financial Advice?

At this point, you may be questioning whether or not social media influencers know what they’re talking about when it comes to finance. Aren’t there laws about who can give financial advice? Well, yes. Influencers generally aren’t qualified financial advisors, so they can’t give financial advice. Overall, finfluencers can be used as a stepping stone to drive your customer down the funnel. If they’re getting the basics and general advice from the creators they follow online, they’re likely to also trust those influencers’ recommendations for financial services, products, and companies.