In recent times we have seen a rise of ‘Finfluencers’ on social media, particularly with the younger generation, who are predominantly more active on social media. Finfluencers are social media influencers who offer advice and information on various financial topics.
Financial education/literacy is becoming more and more important in an increasingly complex financial world, however, a lack of financial education in the school curriculum means the younger generation is turning towards things such as social media for such knowledge. The danger in this, however, is that whilst some Finfluencers offer genuinely helpful tips, some are uninformed, and there are also cases of scammers posing as Finfluencers.
Finfluencers also don’t typically have any financial qualifications and are often not regulated to give financial advice. It can be hard to spot genuine, useful information from the scams, and the Financial Conduct Authority (FCA) is concerned that some ‘Finfluencers’ are not labelling content correctly or promoting products without understanding how they work, or the associated risks.
In July of this year, the FCA pressed ahead with charges against 9 individuals due to their involvement in the promotion of an unauthorised foreign exchange trading scheme on social media. 7 of these individuals were ‘Finfluencers’, and their court dates are set for the future.
That being said, there are some good, informative ‘Finfluencers’ who help people understand jargon, how certain financial products work, explain real-life case studies and give examples of these. This can help bridge the knowledge gap and increase financial education and literacy amongst younger people. However, personal finance is just that, personal to the individual, so it is important to research what is being said and consider how much of the content is relevant to your own circumstances and goals.
Interestingly, a recent survey also showed that 35% of Brits would consider using AI chatbot ChatGPT for financial advice in 2024, up from 27% in 2023. However, there has also been an increase in the number of Brits who would be against using it, up from 35% in 2023, to 43% in 2024.
Whilst it is good that people are thinking about and discussing Financial Planning, the use of AI and Finfluencers can ultimately mean that you do not receive all of the information required to make a fully informed decision that is appropriate for your own circumstances. At Eldon, we are advocates of goals-based personal planning, which focuses on achieving what you want in life, rather than just numbers on a screen. Financial planning is about making capital work towards real, tangible goals over time, and this is ever evolving, as goals and circumstances change and is never a ‘one and done’.
