You’ve probably read about finfluencers — so-called financial influencers who post financial lessons and money advice on social media. They’ve been on the rise over the past couple of years thanks to platforms such as Instagram, TikTok and YouTube. A global pandemic forcing us to increase screen time, plus a surge of retail investing and the frenzy around meme stocks, also helped catapult finfluencers into digital fame. 

It’s easy to be dismissive of such a phenomenon. After all, it’s (mostly) young people giving financial advice in short, catchy snippets on social media. But the rise of the finfluencer goes hand in hand with the democratization of finance. Making high-quality financial information more accessible is a good thing. The world of personal finance has long been mostly targeted toward the middle class or already wealthy. 

The catch, though, is that a lot of money advice out there is lacking in substance or even downright predatory.

Take this from someone who is often branded as a financial influencer — a labeling I personally detest — for writing personal-finance books and offering advice (based on extensive research and expert interviews) via social media. There are plenty of influencers offering well-motivated and quality advice. However, the space is also rife with people looking to make a quick buck. 

It’s critical for consumers — anyone scrolling on social media — to be discerning. Finfluencer work is marketing, and well-crafted marketing at that. It helps to understand the different strategies influencers use to make money.

For example, there are brand partnerships in which you’re basically creating commercials for financial services companies to promote products. These posts are required to be disclosed with language like “I’ve teamed up with” and include #ad and #partner in captions and on photos. This is a legitimate way for creators to make a living (full disclosure: I’ve made money through such partnerships), but the key is being aware of these relationships.

Another way to monetize is through selling your own content, from courses, worksheets and books to t-shirts, hats and tote bags. And there are content arrangements with the social media platforms themselves if your following grows large enough. None of this is problematic outright. But issues can arise due to a lack of transparency, regulation and credentials.

Bad financial advice is nothing new — there have long been grifters and scammers working shoulder-to-shoulder with ethical financial advisers. But it’s now everywhere, and it’s increasingly up to us to do the due diligence and vet whom we trust. This is particularly important when it comes to investing. Someone who doesn’t know you and has no idea about your specific financial situation and goals cannot conclusively say where you should put your money.

Anytime you come across financial advice online — look out for those tantalizing promises to get you rich quick or retired by 35 — take a moment to consider a few things.

First, do an audit of their social media feed to see what the person is promoting. Seeing well-curated ads for products like payday loans should be a red flag.

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