What Has Caused the Rise of “Finfluencers?”

“Finfluencers” are everywhere today. Here’s why.

Listen to our full podcast episode with Richard Coffin (@ThePlainBagel) all about finfluencers and behavioural finance out now.

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And the problem is compounded by a very strange thing that a lot of people won’t be aware of. Research is now showing that for some odd reason, we tend to trust online advice even more than we trust in person advice. It’s very strange. We grant a subconscious kind of effort to give expertise to these people when we’re seeing them online makes no sense whatsoever, but that’s what the research is showing. Have you seen that research at all, what are your thoughts on it?

So, you know, to that point, I think part of it is somewhat of this anti wall street movement to an extent. And one thing I’ve, I’ve highlighted when talking about, uh, if influencers mean critical of that space is to highlight that it doesn’t exonerate the, the, the shortcomings of the professional side of, of investing in finance. All of this really does stem, really, you think of the FinFluencer movement as a whole. A lot of it does stem from 2008, where you had the financial crisis, which really did come from the, uh, risky bet taking of all these large institutions. And so you had this movement online that suddenly came to distrust the professional.

Um, and, you know, we still see that in Canada, uh, not too long ago. CBC has done a number of, of investigations into even, uh, bank branch advisors and the advice provided there and how it can be bad sometimes, how people are given inappropriate financial advice. So the rise of, of finfluencers has in part come from the shortcomings of the professionals.

Agree. Totally.

And so I think, uh, when you talk about trust, that’s one of the things you have to consider. Uh, now there are other reasons, which is, uh, there’s accessibility. The fact that you can pick up your phone and get financial advice really quickly versus setting up an appointment. It’s a lot more enjoyable. Uh, I don’t know, uh, how many, if you’ve ever had a, if you, if the Wealthy Barber would ever need a bank advisor, but if you’ve ever sat down with an advisor, you know, it’s probably not the most entertaining.

That’s right. I agree with you. This is more engaging.

That’s right. It’s more engaging. It’s, it’s more enjoyable and you get to learn something in the process and two Finfluencers to their credit, you know, a lot of them make that an important part of the content they provide as well. How do I make this engaging? Um, and on top of that, there’s the cost barrier as well. Uh, Finfluencer content is mostly free. Um, so all those things really go to the benefit of, of Finfluencers. The distrust of professionals, plus all these benefits, uh, gives them a big step up.