In a groundbreaking exposé, the CFA Institute has uncovered the murky world of “finfluencers” and their impact on the investment decisions of Gen Z. The revelations from their latest research, titled “Finfluencer Appeal: Investing in the Age of Social Media,” shed light on the challenges and pitfalls surrounding financial influencers and call for urgent action from regulators and industry players.
In a world where finfluencers reign supreme, the CFA Institute’s revelations serve as a wake-up call. Click now to uncover the shocking truths that could reshape the way you view financial advice in the age of social media.
The CFA Institute’s report offers recommendations to reduce policy complexity, strengthen disclosures, and bolster financial education and digital engagement practices for finance content creators, consumers, and social media moderators. It recommends:
- That regulators co-operate to design and implement a more universal definition of an investment recommendation; engage with finfluencers to advise and clarify which influencer activities are regulated; and record and publicly report data on complaints and whistleblowing activities regarding finfluencers.
- That social media platforms enhance their controls and take additional responsibility in ensuring content creators clearly display posts that include advertising.
- That investment companies that use finfluencers provide them with compliance training if not already doing so; review finfluencer content before and immediately after it is posted to ensure it remains in compliance; maintain records of social media content commissioned; and ensure that finfluencers clearly disclosure when they are promoting content or are sponsored.
- That financial education providers enhance financial literacy initiatives and strengthen Gen Z investors’ ability to critically evaluate information through considering the motivations, qualifications, and consistency of finfluencer content.
- That professional investment advisers look to do more to engage Gen Z, promoting their knowledge, professional competency, duty of care and ethical responsibilities to stay competitive in an increasingly digitalized world.
To access the complete report, visit: Finfluencer Appeal: Investing in the Age of Social Media.