Can You Tell a 'Finfluencer' From a Flimflammer?

For better or worse, finfluencers have dedicated followers on YouTube, TikTok and elsewhere. Before you take any financial advice, ask these three questions.

A stereotypical con artist holds a pen and points at a contract on his desk.
(Image credit: Getty Images)

A large number of Gen Z investors are forgoing the traditional analytical approach to markets and instead turning to guidance from a multitude of "finfluencers" found on popular social media platforms. It’s a trend that carries numerous significant risks, creating a potential wild west atmosphere for investors on sites such as YouTube, TikTok and Instagram. On these platforms, the transparency and ethical standards mandated in traditional financial services companies are often absent.

Dismissing all market guidance shared on social media as illegitimate would be the simplest approach, but likely not the best one. Some influencers indeed provide valuable insights and follow ethical principles. But others may have hidden agendas, aiming to profit at the expense of less seasoned investors by exploiting their inexperience through biased or self-serving advice.

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Paul Andrews
Managing Director of Research, Advocacy and Standards, CFA Institute

Paul Andrews oversees the strategic direction and leadership of the Research, Advocacy and Standards function at CFA Institute, where he seeks to position the organization as an innovator and thought leader in investment management. Previously, he served as Secretary General of the International Organization of Securities Commissions (IOSCO) for two terms.