“Finfluencers” are social media influencers who share financial information and advice online; these days, they’re taking social media by storm with their clickbait headlines, easy-to-understand messages, and promises of quick wealth. But because finfluencers aren’t regulated, it means they can say whatever they want about any topic – from buy-to-let to Bitcoin – without any consequences. Some may even be scammers. As a potential investor, what do you need to be aware of when you see finfluencer content? Peter Williamson of Avrio Wealth has three pieces of advice.
#1 Approach finfluencers with caution
Popularity does not equal success, so approach personalities with a healthy degree of skepticism. Just because a video has 100,000 or a million views does not mean it is advice worth following. If there are videos you think are valid or interesting, use them as a jumping-off point to do your own research.
#2 Get the full social media picture
If someone tells you they made 50% on a bitcoin investment in the last month, that may well be true. But it is also the case that the price of cryptocurrency has dropped by almost a third in the last four months.
As with any investment, it’s important to have all the information at hand in order to make sound decisions, especially when someone may suggest that they have a sure-fire way to make money quickly. It may not be that finfluencers are trying to deceive you, simply that there is not enough space in the video to tell the full story — or they don’t have all the information themselves.
#3 Ensure they’re not scammers
At a time when cyber fraud is a daily fact of life, scammers proliferate on social media. In 2019, Action Fraud said that more than £3m had been lost in 356 fraudulent “get rich quick” schemes on Instagram over a five-month period, with most of the victims aged between 20 and 30. Scammers promised high returns within hours of investing.
Being aware of the issues surrounding finfluencers makes you a savvier investor. Their promises of getting rich quick can be exciting but highly risky; however, earning returns more slowly, over time with considered investments, can truly transform your life.
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This material is intended for educational and informational purposes only. It is not intended to provide specific advice or recommendations for any individual. Additionally, you should consult with your Financial Advisor, Tax Advisor, or Attorney on your specific situation. The views expressed in the material are that of the author and do not necessarily reflect those of any market, regulatory body, State or Federal Agency, or Association. All efforts have been made to report or share true and accurate information. However, the information may become materially outdated or otherwise rendered incorrect due to subsequent new research or other changes, without notice. The author nor the firm are able to always verify the content from third party sources. For additional information about the firm, please visit the MAS Website at https://www.mas.gov.sg/ and the SEC Website at www.adviserinfo.sec.gov. For a copy of the firm’s ADV Part 2 Brochure, please contact us at firstname.lastname@example.org
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