Personal Finance Influencer Red Flags

Personal finance influencers share money tips and strategies with their followers across social media platforms, podcasts, and blogs. Millennials and members of Gen Z frequently turn to channels like TikTok, Instagram, Reddit, and YouTube when they want to improve their financial situations. While getting free money advice from influencers can be a cost-conscious move, it’s important to know how to spot potential scammers, fakes, and frauds.

Key Takeaways

  • Personal finance influencers share money insight and tips with their followers across social media channels, blogs, and podcasts.
  • Professional financial experience or education isn’t necessarily a qualification to becoming an influencer because many draw on their own experiences instead.
  • Financial advice offered by influencers may be free, but it may not always be accurate or suited to your situation.
  • Supplementing advice from influencers with guidance from a professional financial advisor can help you create a grounded plan for managing money.

What Is a Personal Finance Influencer?

A personal finance influencer is someone who uses social media platforms to offer tips and insight on money to their followers. These are often everyday people who use their own experiences with money to help others solve their financial problems. While some influencers may have a background in financial services, such as working in banking or being a financial advisor, it isn’t a requirement to become one.

Personal finance influencers create content related to different financial topics and provide it to their followers for free. This content can include blog posts, social media posts, podcasts, financial printables (downloadable PDF files that you can print), ebooks, guides, courses, workshops, and webinars.

Some of the most popular channels for financial influencers include:

  • TikTok
  • Instagram
  • YouTube
  • Facebook
  • Reddit

Influencers can also create blogs or websites to promote their content. They may monetize their blog and/or social channels in a variety of ways, including engaging in affiliate marketing, running ads, selling digital or physical products, charging fees to access premium content, and creating sponsored content. Some influencers also may offer coaching services for a fee.

6 Personal Finance Influencer Red Flags

Before taking a personal finance influencer’s advice, it’s important to make sure that the information you’re getting is trustworthy and that they have proven authority and credibility. Watching out for common red flags can help you to identify influencers who aren’t legitimate.

Here are some of the most common signs that a personal finance influencer may not be what they appear:

1. Promises That Are Too Good to Be True

Personal finance influencers who frequently use certain terms may need to be taken with a grain of salt, as there are no guarantees when it comes to money. Look out for claims like foolproof, guaranteed, or no fail. Also, beware of any influencer who promises to help you get rich quick with minimal effort.

2. Hard Sell

Genuine influencers are interested in helping their followers improve their financial situations first—any money that they make should come second. If you’re constantly bombarded by sales pitches, it could be a sign that an influencer doesn’t have your best interests in mind when dispensing financial advice.

3. Lack of Proof

Influencers who claim to make $100,000 a year from side hustles—or who say they’ve retired at age 35—should be able to back that up. If an influencer can’t show you the receipts to demonstrate how they achieved their success, you should approach their advice with a healthy amount of skepticism.

It also doesn’t hurt to look up a scattering of facts that the influencer cites on trusted sources like the Internal Revenue Service (IRS) or U.S. Securities and Exchange Commission (SEC) websites. Are they accurate, careful, and up-to-date?

4. Pushing Too Many Paid Promotions

Influencers can make money through affiliate marketing or sponsored posts. However, if they’re constantly pushing products that they have not used or are writing sponsored post after sponsored post, it may be a sign that earning money is their main motivation—not sharing genuine financial advice.

5. Lots of Followers, But Little Engagement

An influencer who boasts hundreds of thousands or millions of followers may seem impressive. But it’s important to look at how many of those followers engage with their content by liking, commenting on, or sharing it. High follower counts could be hiding bots instead of real readers.

6. Requests for Money Up Front

If an influencer asks you for money or gift cards before providing content, a product, or a service, that could be a dead giveaway that what they’re really doing is running a scam.

Using hashtags, such as #financialadvice or #moneytips, can make it easier to search for personal finance influencer content on social media.

Who Uses Social Media for Financial Advice?

Anyone can search social media for financial tips, which is why it isn’t surprising that people turn to these platforms for direction on money issues:

  • According to the 2022 Investopedia Financial Literacy Survey, people across different generations said they commonly searched online for financial information. Younger generations increasingly look to social media outlets—primarily digital and video-based content—for information because these channels are easy to consume and understand.
  • A survey by the National Association of Personal Financial Advisors found that more than one-third (39%) of Americans under age 65 get financial advice online or from social media, while more than one-fourth of Gen Zers get money tips through social media platforms.

Young adults are turning to Reddit and X (formerly Twitter) as outside-the-box options for getting financial advice. Part of the appeal may lie in the fact that much of this information is offered for free. That can be more attractive to young adults, who would rather avoid paying the 1% or more in annual management fees that financial advisors often charge.

Another reason why social media is commonly used for financial advice is its relatability. A twentysomething struggling to grow their income or pay off student loans may be able to relate more to a thirtysomething who has successfully paid off their debt with side hustles than a financial advisor in their 60s who has a seven-figure net worth.

Women, BIPOC, individuals who identify as LGBTQ+, and people with different abilities may seek out personal finance influencers who share similar backgrounds rather than look for help from an industry that is still significantly lacking in diversification.

Should I Get Financial Advice From Social Media?

Whether you feel comfortable getting money tips and advice from social media platforms can depend on how reliable you think that information will be. Social media influencers can provide financial advice for free, which is a plus if you’re on a tight budget, but it shouldn’t necessarily be considered a substitute for advice from a financial advisor, a financial planner, or a certified credit counselor.

How Can I Spot Scams?

A personal finance influencer who makes promises that seem too good to be true or asks for money from you without providing you with any content or services could be a scammer. Be wary of anything that feels odd; in other words, trust your gut and avoid influencers who give off the wrong vibe.

Can Anyone Offer Financial Advice Online?

Technically, yes, anyone can share financial tips or insight through social media channels, a podcast, a website, or a blog. However, whether that information is accurate and legitimate can depend on the individual sharing it. Again, personal finance influencers often use their own experiences to inform the advice that they share, which may or may not include professional expertise in the financial services industry. Still, having a financial certification couldn’t hurt.

The Bottom Line

Asking the right questions can help you find the right personal finance influencers to follow. For example, ask yourself what motivates this person to share their money tips. Is it a genuine desire to help others? Or is it all about making money?

If they’re leveraging social media platforms to make money as an influencer, are they disclosing affiliate relationships and sponsorships? Are they transparent about how they make their income? Can they back up their claims with verifiable proof? Looking under the hood and kicking the tires can help you determine whose advice is worth your attention.


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