Financial influencers on TikTok and Instagram reshape advice
A new breed of financial influencers on TikTok and Instagram is captivating young audiences with bite-sized investment tips, diverging from the staid world of traditional advisers. These 'finfluencers' leverage memes, humor, and viral videos to demystify money matters. Unlike licensed professionals, they often operate without formal credentials, raising questions about reliability.
The rise of financial influencers, known as finfluencers, on social media platforms like TikTok and Instagram marks a shift in how younger generations approach personal finance. These creators, often in their 20s or 30s, deliver advice through engaging, short-form content that contrasts sharply with the formal consultations of traditional investment advisers.
According to a MarketWatch report, finfluencers such as Humphrey Yang, with over 1.5 million TikTok followers, simplify complex topics like Roth IRAs and stock picking using relatable scenarios and humor. Yang, a former banker, explains, 'I want to make finance accessible to everyone, not just the elite.' Similarly, Tori Dunlap of Her First $100K boasts 4.5 million Instagram followers and focuses on women's financial empowerment, urging followers to 'negotiate their salaries and build emergency funds.'
This trend accelerated during the COVID-19 pandemic, as lockdowns drove people online for financial education. The article notes that finfluencers have amassed billions of views; for instance, TikTok's #FinanceTok hashtag has surpassed 100 billion views. Platforms' algorithms amplify this content, making it more visible than brochures from certified financial planners.
However, the lack of regulation sets finfluencers apart from registered investment advisers, who must adhere to fiduciary standards under the SEC. The report highlights concerns from experts like Ted Jenkin, a certified financial planner, who warns, 'Social media advice can be entertaining but often lacks personalization and may promote risky behaviors.' No specific incidents of harm are detailed, but the piece emphasizes the need for viewers to verify information.
Traditional advisers, typically older and credentialed with designations like CFP, operate through firms and charge fees for tailored plans. In contrast, finfluencers monetize via sponsorships, affiliate links, or courses, sometimes blurring lines between education and promotion. The article profiles Vivian Tu, aka Your Rich BFF, who grew her audience to 3 million on TikTok by sharing 'no-BS' tips on debt and investing, stating, 'I'm bridging the gap for Gen Z who distrust banks.'
While finfluencers democratize finance, their influence prompts calls for better oversight. The SEC has issued investor alerts about social media risks, but enforcement remains limited. This evolution reflects broader changes in media consumption, where trust increasingly flows through personal brands rather than institutions.