By Norah ODonnell
The pursuit of financial freedom has compelled businesses, investors, and individuals to seek professional advice that will help them attain the desired level of success. The practice is common among the Millenial and GenZ investors embarking on a journey to control their money and cap debts amid the unprecedented economic downturn.
This exciting journey to financial independence has given rise to finfluencers who have instigated a buzz on social media with practical financial opportunities and advice. You might have encountered numerous concepts on social media and wondered how the finfluencers impact financial decisions.
This guide explores who are finfluences and their significance. Also it oulines the challenges, and factors to consider when engaging the financial influencers.
What is a Financial Influencer (Finfluencer)?
A finfluencers is an individual providing financial and investment advice to investors. For years , the finfluencers have generated financial content on stock markets, personal investments, management, banking, and cryptocurrency.
As the financial landscape evolves, the finfluencers have specialize in different fields aim at optimizing the the investor decision. The finfluencers are usually grouped into three categories: celebrities, corporate finfluencers, and ordinary investors showcasing as YouTubers and TikTokers. In a recent study, Kim Kardashian, Elon Musk, Humphrey Yang, and Anthony Schneider were ranked among the most popular finfluencers commanding a large following.
Occasionally, financial influencers are tasked to develop content and videos on social media that will attract large audiences and establish solid customer relationships. Particularly, the finfluencers solidify their popularity by deploying their influencer marketing strategies that entertain large audiences, captivate potential buyers, and nurture brand value.
The exemplary work of finfluencers convince fast-paced companies to establish strategic partnerships with finfluencers to increase brand value and expand their market presence. In return, the finfluencers receive compensation from the companies they have partnered with.
Advantage of Finfluencers
With the rapid growth of the financial ecosystem, the finfluencers have become more powerful in marketing than traditional promotion strategies. Besides the influencing culture, the finfluencers have provided investors with endless benefits.
Promote Financial Education: The finfluencers have played a critical role in boosting financial education for investors. The access to educational content conveyed by finfluencers help investors reach informed budget, saving and investing decision. The finfluencers allow the investor to learn new things to boost their financial literacy.
Improve Financial Inclusivity: Unlike conventional investment advisory firms such as brokerage firms, which are expensive, the finfluencers avail critical Information cheaply by leveraging social media platforms. The finfluencers provides a detailed procedure to access financial product through their education programs. Also the finfluencers persuades the masses to become more active in this hyper-connected economy.
Offer Financial Advice: The finfluencers have played a significant role in providing financial advice to an investor. The finfluencers equiped the investors with fundamental knowledge on investments aiming at reducing financial risks. Also, they ensure the advice offered by other financial experts is accurate, reliable and convinent by avoiding deceptive schemes.
Disadvantage of Finfluencers
The growing popularity of finfluencers has encouraged the public to seek financial advice on the social media platforms. However, some of the advice provided by the finfluencers has turned out to be impractical. Such occassion expose the investor to fraudlent schemes.
Misleading Information: With the changes in the online world, the finfluencers might provide financial advice that might expose the investor to financial losses. Also, the finfluencers culture commonly adopted by finfluencers might subjects investors to unnecessary pressure in venturing in unprofitable businesses.
Lack of Knowledge: The dynamism in information technology, mandate the finfluencers to remain upto date with emerging trends. Failure to cope with the changes in financial sector undermines finfluencers career growth. Also, the finfluencers might lack sufficient qualifications to guide the investors accordingly.
Factors to Consider When Engaging a Finfluencer
The interlinked nature of financial sector makes it inevitable to escape continuous regulatory scrutiny. Currently it is among the most regulated sectors in the world. With the rise of influencers, global regulators have joined forces to monitor financial activities conducted by finfluencers, and promoters.
The regulators issued warnings concerning the finfluencers engaging in deceptive practices and fraud. From the regulatory warning it is essential to consider the following factors to avoid falling into the trap of unlicensed finfluencers or scammers.
Consumer Protection
Since the government has implemented policies to safeguard consumers from unlawful business practices, the finfluencers must implement measures that protect the investors. The finfluencers should disclose critical Information, including their compensation details and product endorsement, to the public.
Compliance with Regulation
While seeking advices from the finfluencers you should ensure they are fully licensed and their business practices align with the law. The finfluencers should shun from deceptive marketing practices that mislead the consumers.
Conclusion
With the rise of finfluencers, it is crucial to make decisions that align with your financial goals. However, before seeking for advice from finfluencers , you should conduct a background check to examine the viability of the business opportunity. You should extensively research business ideas to develop a clear picture of what you desire before seeking for investment advice from the finfluencers.
Additionally, the investors are advised to deal with licensed and regulated financial influencers to avoid the inherent risk of financial losses. The investor should assess whether the finfluencers hold a professional certificate and fully comply with the regulatory requirements.