Is That Finfluencer’s Advice Right for You?

Social media has transformed how we consume information, and personal finance is no exception. “Finfluencers” or financial influencers offer everything from budgeting hacks to investment strategies across TikTok, Instagram, Facebook, and YouTube – making it easier than ever to access financial advice. But before you heed that advice, here are a few key things to consider because we don’t want you to put your financial health at risk. 

Credentials and Qualifications: Who’s Behind the Profile? 

It’s easy to be drawn in by the allure of a large follower count and a seemingly glamorous lifestyle, but just because someone is popular doesn’t mean they are qualified to offer financial advice. Before you take influencers’ tips seriously, dive into their background. Are they a certified professional? Do they have legitimate education and experience in finance? Credentials like these show that someone has passed rigorous exams and adheres to high ethical standards. 

If an influencer isn’t transparent about their qualifications, their advice should be approached with caution. It’s important to know if someone is a paid spokesperson or a credible expert. If they have conflicts of interest, they may be more interested in generating money from their followers than actually helping their followers get better with money. 

Remember: One Size Doesn’t Fit All 

While a finfluencer might give you fantastic tips about investing or budgeting, you should remember that their advice is usually generalized. Financial situations vary, and what works for someone with a different risk tolerance, income, or financial goal may not work for you. For example, an early-career millennial and someone nearing retirement will have very different needs. 

Do Your Own Research 

Finfluencers may present helpful tips in an easily digestible way, but you still need to verify their advice through reputable sources. Avoid making financial decisions based solely on their content. Check government websites like the FDIC, SEC (Securities and Exchange Commission) or IRS, or visit your trusted local bank for objective, fact-based information. 

Cross-checking is an important step, especially when it comes to big decisions like investing or managing debt. Make sure the information you’ve heard isn’t influenced by paid partnerships. A reputable finfluencer should present a balanced perspective and make it clear if they have any affiliations. 

Understand Investment Risks 

No one can guarantee investment returns. Whether you invest in the market, cryptocurrency or a business, there is always some level of risk. You should be skeptical of anyone claiming to have a foolproof strategy for high returns or a way to get rich quick with no risk. 

Market conditions change, and just because a particular strategy worked well for a finfluencer in the past doesn’t mean it will work the same way for you. Remember, past performance does not guarantee future results. You must be prepared for potential losses and remember that investing is a long-term endeavor. 

Beware of Emotional Appeals 

Influencers are often skilled marketers, and their success typically relies on creating an emotional connection with their audience to sell themselves and products. They might use storytelling, aspirational imagery, and persuasive language to build trust and push you toward following their financial advice. 

Stay objective, and do not let hype cloud your judgment. If an influencer’s advice seems more emotional than logical, it’s a sign to consider their advice with caution. Focus on data and logic to avoid being swept up by flashy promises. 

Keep Your Interests in Mind 

Financial advice from influencers can be a great way to learn about new financial opportunities, stay updated on trends, and get motivated to manage your money better. However, you should never rely solely on their recommendations. When in doubt, consult a qualified financial professional who can provide tailored advice for your situation. 

Want to learn more about how to make financial moves that fit your goals and lifestyle? Reach out today.