According to the US-based FINRA Foundation, nearly two-thirds of young American investors are taking financial advice from financial influencers.
These so-called “finfluencers” offer – often unregulated – financial advice to young people, predominantly on social media. Finfluencers can negatively impact young investors by encouraging them to pursue “get-rich-quick” schemes or make investment decisions without providing the necessary risk warnings.
And it’s not just a US problem.
It’s all but impossible to police the financial “advice” your loved ones receive online. However, you can teach them important money lessons, providing them with the tools they need to invest sensibly and spot the potentially harmful advice of unqualified finfluencers.
Continue reading to learn more about finfluencers and five important lessons to teach your loved ones about safe investing.
Social media finfluencers provide online financial “advice” that is often unregulated, high-risk, and not tailored to individuals’ needs
Finfluencers have gained popularity on social media in recent years, sharing advice on platforms like TikTok, Instagram, and YouTube. As such, their primary demographic is Gen Z (those born between 1997 and 2012), who are most likely to use these platforms and interact with their content.
In fact, according to research from the FCA, 85% of young investors acknowledge that social media platforms were highly influential in their investment decisions. A further 43% admitted to using these sites as their primary research tool.
As an unchecked source of financial advice, finfluencers can pose an inherent risk to your loved ones’ wealth.
This is because finfluencers are generally not regulated. FT Adviser reported back in September 2025 that three individuals were criminally charged with communicating an invitation to engage in investment activity, contrary to the Financial Services and Markets Act 2000.
Finfluencers have also been linked to scams. The FCA reports that more than 90,000 people lost a combined £75 million due to finfluencers encouraging trading in Contracts for Difference (CFDs).
In addition, the advice offered by finfluencers is often given to a broad audience and is therefore generalised and not specific to the individuals it reaches.
5 lessons to teach your children about investment literacy
- Understanding risk
There is no such thing as risk-free investing. Whenever you invest in stocks or shares, you run the risk of losses or even losing your money entirely.
However, many finfluencers fail to inform their audience of these risks, largely because they are focused on driving engagement. This involves amassing followers rather than complying with FCA regulations.
The reality of investing is a constant balancing of risk and reward. The more risk you take, the higher your chance of significant returns, but of potential losses too. The less risk you take, the less likely you are to lose (or gain) significant sums. Teaching your loved ones this basic principle can encourage them to be more mindful when weighing advice online.
- Research before you invest
Whenever you receive investment advice, it is up to you to decide whether it is reliable or not, and if it’s right for you.
You can teach your loved ones to think critically about the authenticity of an offer. Are the investment returns credible? Does the finfluencer identify the risks associated with their advice, or show FCA regulation badges or certificates? Is the investment suitable for their goals?
Past performance is no guarantee of future returns, but researching historic trends and taking steps to ascertain the risk of any investment opportunity is sensible before parting with your hard-earned wealth.
- Beware of investment scams
While some finfluencers likely have good intentions, there are those who promote too-good-to-be-true investment opportunities only to scam young investors out of their money.
It’s good practice to approach get-rich-quick content with a healthy dose of scepticism. Keep an eye out for scam indicators, such as:
- Investments that offer “guarantees” or high returns for low risk
- High-pressure tactics, often involving time-limited or once-in-a-lifetime offers
- Advice from social media accounts on which the user doesn’t show their face or uses an AI voice-over.
Your loved ones must conduct their own due diligence before making any investment decisions, but you can also educate them on the value of consulting a professional financial planner.
- Investing is a long-term strategy, not a quick win
Contrary to the dream that some finfluencers might try to push, investing isn’t a shortcut to vast wealth.
Investing is a long-term strategy intended to be in place for decades rather than days.
It’s important to reaffirm this to loved ones. The fast-paced nature of the internet and the constant barrage of trends to chase and “next big things” can confuse novice investors into making emotional or reactionary decisions.
Instead, it is generally preferable to ignore the noise and stay the course. While it’s easy to become concerned by market volatility, history tells us that markets bounce back. Rather than panicking, your loved ones will likely be better served by ignoring the noise and holding onto their investments.
- Diversify your investments
When you invest in one type of stock, your returns depend on that stock’s performance. This means that if it does well, so do you. If it performs poorly, the value of your investment will fall along with it.
Protect your loved ones’ investment strategy by advocating for a diversified portfolio composed of various asset classes market sectors and geographical regions.
Diversifying wealth spreads risk. If one market dips, another might rise, meaning an overall investment remains stable.
Get in touch
While some finfluencers might provide generalised tips that are broadly sensible, financial planning is not a one-size-fits-all situation.
If you want to help your loved ones make sensible decisions about their financial future, get in touch with HFMC Wealth today. Contact us online or call 020 7400 4700 today to help plan your loved ones’ financial future.
Please note
This article is for general information only and does not constitute advice. The information is aimed at individuals only.
The value of your investments (and any income from them) can go down as well as up, and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
