Beware the finfluencer: what employees need to know
Financial influencers – or finfluencers as they are known – have been gaining in popularity in recent years, especially among the young. In fact, the FCA reports that 58% of under-40s who have invested in high-risk investment products say their decision was based on hype on social media and the news.
Not only that, 62% of those aged 18-29 follow finfluencers online and 74% say they trust their advice.
Finfluencers share financial advice, usually in bitesize content and videos. They might share information on anything from budgeting and savings tips to promoting investment products and cryptocurrency. And millions log into social media platforms like TikTok every day to consume this content and get financial advice.
A question of trust
Just how trusting should people really be of unqualified strangers who give financial advice – and who in some cases are being paid to promote financial products?
Anyone can set themselves up as a finfluencer on social media. They don’t need to be regulated, or have any financial knowledge, experience, or skills. This means a finfluencer could say just about anything.
This is such a cause for concern that the FCA has released guidance to help clamp down on finfluencers – and help improve the way financial products are promoted on social media.
But what can people do to avoid the potential pitfalls of following finfluencers’ advice? Here are a few rules that could help employees sort fact from fiction:
What employees should watch out for
- Be questioning: Employees should always question what they’re watching. Popular videos with thousands or even millions of views or likes don’t necessarily contain good or accurate advice – so they should view it with a skeptical eye.
- Do independent research: Employees shouldn’t take what they see at face value and rely solely on what a finfluencer is telling them. It’s always best to check that the information is correct, so they should do their own research and cross-reference with regulated advice.
- Be wary of ‘get rich quick’ schemes: These could be scams in disguise, especially if promising high returns for little risk. Remember: if something sounds too good to be true, it probably is.
- Get the facts from regulated firms: They’re legally required to treat customers fairly and provide information that’s clear, fair and not misleading.
How employers can help
If you’re worried that your employees are being taken in by finfluencers, there’s lots you can do:
1. Raise awareness of the risks
Let employees know what to watch out for in finfluencer content.
A handy checklist that outlines the risks could help employees stop and think before they follow financial advice from a finfluencer. Promote this across your internal communications and send regular reminders to keep it fresh in employees’ minds.
2. Promote trustworthy tips and tools
One of the reasons why employees may be drawn to finfluencer content is that it’s digestible and accessible. The major downside is that, unlike regulated financial advice, it could be misleading or inaccurate.
So it’s important to point employees towards financial content that’s both regulated and easy to understand. That way, they can feel safe in the knowledge that they’re getting legitimate information in a way that suits them.
Government-backed services such as Money Helper are a good example of this. They provide clear and simple guidance on a range of financial topics, as well as tools such as savings calculators and budget planners.
3. Signpost to credible content
Help turn employees away from social media for their financial advice and towards credible content that’s designed to be clear, balanced and puts their needs first.
Free and impartial services like Money Helper and Pension Wise are a good starting point, so signpost employees to these in your internal communications.
If your benefits package includes financial wellbeing support or coaching, make sure that employees know about these too – so spread the word.
For more information and resources on how you can help support your staff, take a look at our Financial Wellbeing hub and read our articles.
In partnership with Standard Life
Standard Life are part of Phoenix Group, the UK’s largest long-term savings and retirement business. We both share an aligned ambition to help every customer enjoy a life full of possibilities.
