Kel's worth a follow in world of fake finfluencers

‘Finfluencers’ – or financial influencers – pop up on Instagram, Facebook and TikTok to provide us with handy tips.

They can a great help to confused consumers who want to save money and get the best deals.

But there is also a dark side to the phenomenon with many so-called experts - or downright chancers - steering people into dodgy investments.

Blindly taking money advice from such online content creators could cost you thousands, new research warns.

More than half of adults who have made financial decisions based on social media advice have lost money, according to a study by UK bank TSB. 

Some 31% who use social media have acted on financial advice they have seen – and 55%  have lost money as a result, it found.

Some ‘finfluencers’ were found to spout illegal financial advice and misinformation to followers, and plug high-risk or even fraudulent crypto ‘opportunities’.

Scammers often even hijack the images and reputations of legitimate influencers to do the same.

However, some professional ‘finfluencers’ are well-qualified and share useful correct information on how products such work - or dish out savvy budgeting tips, 

One this new breed to feature regularly on our pages is Kel Galavan, a qualified financial advisor who knows all about investments.

As a busy mum who felt the brunt of the post-2008 financial crisis, she also has a wealth of real-life experience in dealing with debt and making ends meet on a tight weekly budget.

As such, she gets angry when asked about less credible ‘finfluencers’ who seem to increasingly populate the online environment.

“Honestly, people like these make me cross, taking advantage of other people's dreams and hopes for their futures,” she says.

“The rise of “finfluencers” selling get-rich-quick dreams online is deeply worrying. If there really were a foolproof way to build instant wealth, why would anyone share it with thousands of strangers?” 

“And if it worked so well, why isn’t everyone already rich? The truth is, these promises are more about profiting from people's attention and desperation than offering sound financial guidance.”

Last month, Britain’s FCA cracked down on finfluencers and asked for 650 items to be deleted from social media. The watchdog’s operation led to three arrests in the UK.

That won’t solve the problem but at least it’s a start and it’s a lot further than our own watchdogs have got in cleaning up online finance.

The Competition and Consumer Protection Commission doesn’t appear to mention the specific term ‘finfluencer’ on its website.

However,  a 2022  CCPC  report, referenced “specific concerns around influencers promoting cryptocurrencies and other financial products, particularly when the influencer had no experience in the area.”

When it comes to general influencers, the report found that “48.4% of their commercial content reviewed by the CCPC was not labelled as advertising in any way (as it should be). Poor levels of labelling relating to influencers’ marketing of their own brands was an area of particular concern identified in the research.”

The CCPC’s research also reveals that many consumers who bought as a result of influencer promotions feel they were misled in their purchases. 

However, consumers say they can be reluctant to report such issues to a regulatory authority such as the CCPC, preferring instead to unfollow such influencers.

Earlier this year, CCPC ‘took action’ by writing to three general ‘influencers’, including a fitness guru and  Brian O’Driscoll, whose misdemeanor was widely reported due to his fame.

The rugby star failed to disclose a commercial interest in an item promoted on his Instagram account.

Further CCPC actions may be tougher and tackle the many, frankly, far more serious breaches than those of Mr O'Driscoll . 

But to date, the problem (with finfluencers specifically) is worrying.

“Much of the advice online isn’t regulated, isn’t personalised, and usually carries hidden agendas,” Kel warns.

"Many of these influencers earn commissions, push risky products, or profit from selling courses and e-books, not from actually building wealth through the methods they promote. In reality, they make their money from the people they sell to; their wealth funnel is not what they say it is. People must start asking: Who really benefits here?

Particularly beware influencers who promote financial schemes they clearly have little professional expertise with, especially if connected to cryptocurrency.

In 2022, Kim Kardashian had to pay $1.26m to the US Securities and and Exchange Commission after failing to disclose that she was paid $250,000 to publish a post on her Instagram account about EMAX tokens, the crypto asset security being offered by EthereumMax. 

So what should people do?

“Financial literacy is the best protection,” Kel advises. “Self-education empowers people to spot red flags, make informed decisions, and build real wealth over time — slowly, steadily, and safely. Get rich quick promises may be tempting, but sustainable success comes from knowledge, not shortcuts.”