Online trading expert InvestinGoal conducted a study ranking 50 financial influencers, often referred to as 'finfluencers', by analyzing their combined follower, like, and subscriber count on various social media platforms. Humprey Yang and Tori Dunlap take the top spot with a cumulative number of more than 81 million followers, showing social media's great importance in modern finance.
Finfluencers Create Personal Finance Trends
In recent years, finfluencers have taken social media by storm. They have transformed the way people approach money management and their personal investment. A recent study shows that this is an extremely profitable AND lucrative branch of social media.
Yang, who has been crowned the most popular finance influencer, has accumulated 54,317,401 followers, likes and subscribers across social media, with 501,000 Instagram followers, 3,300,000 TikTok and 49,500,000 likes on TikTok.
Financial influencers like Yang, Dunlap and Price have gained massive followings by providing financial advice and insights through various social media platforms. They are breaking down complex financial concepts into easily digestible content, making personal finance more approachable for the average individual.
Many finfluencers cater to younger generations, focusing on financial topics that resonate with Millennials and Gen Z. Poku Banks, for instance, is on a mission to help young people make the most out of their money. Influencers like Josh Rincon and Taylor Price also create content on digital money, discount hacks, and analyzing celebrity investments.
31% of Retail Investors Trust Financial Influencers
The younger generation of investors is increasingly relying on advice from influencers, including when it comes to investing their funds. As shown by a survey conducted by the Cypriot financial markets regulator, CySEC , one in three retail investors trusts the advice of financial influencers.
French individuals are the most likely to seek help from self-taught advisors on social media, with 42% of respondents admitting that they have made an investment decision based on the tips and advice of finfluencers at least once in their life. The lowest percentage of those interested in this form of investment advice was found in Germany (24% of respondents). However, this still suggests that one in four investors invested in something because a famous person on the internet advised them to do so.
Although such behavior is becoming more common, they are not always entirely safe and may carry additional risks. Finfluencers derive financial benefits from promoting various products and services, so they may accidentally (or deliberately) encourage the use of dishonest companies' offerings or those with signs of potential fraud, including 'get rich quick' schemes.
CySEC warned against financial influencers last year, reminding retail investors not to base their decisions on emotions and pressure from people considered authorities on the internet. Instead, they should rely on rational thinking and their own market analysis.
Love Island Contestant Educates Finfluencers in the UK
To counteract potential harm to retail investors, the British FCA has decided to educate domestic finfluencers by employing one of their peers. Love Island contestant Sharon Gaffka, a prominent social media influencer in the country and participant in the popular British reality TV show Love Island, became the ambassador of the FCA among financial influencers in early April. Her task is to encourage internet personalities and their agents to identify potential financial schemes better.
"We've seen more cases of influencers touting products that they shouldn't be. They are often doing this without knowledge of the rules and without understanding of the harm they could cause their followers," said Sarah Pritchard, the FCA's Executive Director for Markets. "We want to work with influencers so they keep on the right side of the law, as this will also help protect people from being shown scams or investments that are too risky."
Australia conducted a separate analysis of the financial influencer market. According to ASIC research, 28% of young people follow at least one finfluencer on social media, and two-thirds of them change their investment decisions based on their content. As a result, the Australian regulator wants to introduce separate licenses that financial influencers will need to obtain to provide their services on social media.
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