Finfluencers are actively harming consumers and preventing them from achieving financial independence. Unsuspecting social media users are increasingly being subjected to flashy posts where people are shown driving fancy cars and flaunting their wealth but these are usually just props. In order to achieve true financial independence and achieve financial literacy, one must do proper research and carefully investigate questionable claims made online. And there are some things that never change: making money is hard and managing it effectively is even harder.
The best investors like Warren Buffett are not out their giving financial advice all the time. Some years back, the Oracle of Omaha bank-rolled Bank of America a massive $5 billion in order to help the financial institution maintain its business operations. Meanwhile, some influencers like Waqar Zaka and Saad Hashmani from Pakistan have built huge followings promoting questionable trading strategies. These speculative suggestions have led to people losing large sums money.
Concerningly, the finfluencers tend to target some of the most vulnerable populations – people who lack basic education and are likely to believe almost anything they see or hear. That’s why the UK’s Financial Conduct Authority (FCA) among other prominent global regulators have stepped up their scrutiny of so-called finfluencers.
The scope and damage of influencers extends beyond just giving bad financial advice and selling scam courses. Not too long ago, Tai Lopez was busted by the US Securities and Exchange Commission (SEC) for allegedly making false claims to investors and acquiring substantial investments from them. And several years back, Jason Bond was also indicted by the SEC for making materially false claims about his trading activity.
Earlier in 2022, at the time of the FTX collapse, basketball players such as NBA superstars Steph Curry and Shaquille O’Neal were also the subject of legal actions because of their promotion of Sam Bankman-Fried‘s now-defunct FTX exchange. Being a prominent personality means you are speaking from a position of great power. And with great power should also come great accountability, transparency, and responsibility.
That’s why regulators such as the FCA, SEC, among many others have taken concerted steps towards ensuring better consumer protection and encouraging more protections. Now this also goes beyond finfluencers, of course. For instance, when companies make undisclosed promotions without proper attribution, then these can lead to serious issues and consequences from the US Federal Trade Commission (FTC).
