As Social Media Retreats From Content Moderation, ‘Finfluencers’ Have Gen Z’s Eyes and Ears

Finfluencers Have Gen Zs Eyes And Ears
  • For better and for worse, consumers — particularly millennials born from 1981 to 1996 and Gen Zers born from 1997 to 2012 — are flocking to a growing group of financial social media influencers, or “finfluencers.”
  • Access to all forms of financial advice online is increasing at a time when institutional control over content is waning.
  • That almost certainly means changes in how the subprime space views and serves its customers.

Recent evidence abounds of the migration of financial advice — and consumers of financial advice — to social postings.

For example, a study by Emplifi found that financial influencers — or “finfluencers” — on Instagram and YouTube more than doubled their follower growth compared to influencers as a whole (6% versus 3% on Instagram and 8% versus 4% on YouTube).

A PYMNTS Intelligence report found that 79% of millennial and Gen Z respondents had turned to social media for financial advice, putting the algorithms of Meta, Alphabet, ByteDance, X, and others at least somewhat in control of the content each user experiences.

Emplifi median follower growth stats

TikTok alone garnered the attention of 62% of Gen Z respondents, with 34% reporting receptivity to finfluencer content.

And in a global analysis focused on finfluencer “influence” on investing, the World Economic Forum found access to diverse and inclusive social media financial advice was increasing despite ongoing challenges of inconsistent information quality and opaque credentials for content creators.

“With the lack of consistent global regulations around this content, the risk of making misguided investment decisions due to misinformation and fraud is greater than the risk would be if the advice was taken from traditional advice channels,” wrote the authors of the World Economic Forum study.

I think that applies equally to consumers of financial advice as a whole.

A Different Consumer for a Different Time

Meta’s announcement that the company was replacing its team of fact-checkers with a community notes system fashioned after Elon Musk’s X signaled an inflection point in the gradual retreat of social media companies from the strict content moderation policies they established after the events of January 6, 2021.

That leaves the responsibility of recognizing misleading and, in the case of financial advice,  risky information squarely in the consumer’s hands.

Ultimately, no one can predict the outcome of a financial management or investment strategy, sound or unsound.

PYMNTS Intelligence Report stats

But investors who stand to lose their legacies typically have more training and experience (and time) to deal with the vagaries of the online financial marketplace than consumers looking to build credit, pay off debt, and live for the future instead of paycheck to paycheck.

Those folks may be more receptive to get-rich-quick appeals, less likely to read deeply into the fine print, and in denial about what they’re spending and risking. That’s why it’s incumbent on subprime professionals across the industry to reflect on the implications — positive and negative — of the rise of finfluencers.

The numbers involved make it necessary. The Emplifi study mentioned above found that finfluencers posted twice the amount of content on Instagram and five times more videos on YouTube compared to the influencer community as a whole. The study drew data from more than 100,000 finfluencers on Instagram and more than 30,000 on YouTube.

Let’s begin with some positives tied to the higher expectations of consumers who turn to finfluencers:

  • Finfluencers make complex financial topics more accessible to subprime consumers, empowering them with knowledge about credit scores, managing debt, budgeting, and saving for the future.
  • They create communities where people can discuss their hopes, dreams, and failures free of stigma. The safe spaces of online communities connect people who have experienced similar challenges so they can learn from each other.
  • In turn, these communities can produce more knowledgeable financial consumers who are skeptical of high fees, predatory practices, and high-pressure sales scenarios and have the confidence to do something about them.
  • They energize a highly diverse marketplace that strives to provide something for everyone. Subprime consumers who make themselves known on social sites can expect their algorithms to respond quickly and serve up more of what they need and want.

But the dynamic finfluencer space also raises concerns:

  • Anyone can call themselves a financial advisor. Many finfluencers lack credentials, dispense oversimplified advice, and make recommendations tied to affiliate marketing arrangements that are not in the consumer’s best interest.
  • The do-it-yourself message of many finfluencers can be counterproductive, particularly when struggling consumers turn to too-good-to-be-true solutions. For example, DIY credit repair can seem much more daunting in practice than in theory before you plunk down your money.

Subprime practitioners can win consumers over with a message that resonates with their higher expectations. Just before President Trump’s inauguration, one nonprofit consumer advocacy group judged X’s community notes feature as a poor substitute for dedicated content moderation.

Our antiregulatory zeitgeist puts the onus on all consumers to look before they leap and on all subprime providers to provide a suitable landing area.