Finfluencers vs. banks: Who are young people really listening to?

The rise of finfluencers is reshaping how younger audiences engage with investing. As social media plays a greater role in financial decision-making, regulators and institutions are reassessing how this influence should be understood and managed. 

Regulation intensifies 

Finfluencers are attracting growing attention from regulators concerned about the accuracy and transparency of financial promotion online. According to a recent Reuters article, the European Parliament has voted to require finfluencers to clearly disclose whether they possess the financial knowledge and competence needed to promote financial products. 

This reflects broader concerns about misinformation and undisclosed promotions. Failing to identify content as paid-for breaches regulatory requirements, and in more serious cases, unlawful financial promotion can result in criminal penalties, including up to two years’ imprisonment and unlimited fines. As a result, some industry observers expect a decline in finfluencer activity as enforcement tightens. 

Regulators are also adapting their approach. The International Organization of Securities Commissions (IOSCO) has urged authorities to “go where the fight is” by targeting fraud directly on social media. In the UK, the Financial Conduct Authority (FCA) has similarly shifted focus toward digital channels, where it is cracking down on misconduct and engaging with finfluencers to help them better understand regulatory obligations. 

Growing influence among younger investors 

Despite regulatory concerns, finfluencers remain highly influential among younger generations. New data from Charles Schwab suggests 70% of Gen Z investors rely on social media and finfluencers when making investment decisions. 

This trend appears to be driven by accessibility and relatability. Traditional financial advice is often perceived as costly and difficult to access, leading individuals to question whether professional guidance is worth the expense. In contrast, finfluencers offer free, easily digestible content that can feel more engaging and relevant.  

As trust shifts away from traditional channels, financial institutions are under pressure to rethink how they build credibility with younger audiences. As Steve Smart, Joint Executive Director of Enforcement and Market Oversight at the FCA, noted: “Finfluencers are trusted by the people who follow them, often young and potentially vulnerable people attracted to the lifestyle they flaunt.”  

At the same time, traditional advice has not been entirely displaced. Of the Gen Z respondents, 67% still say they value financial advisers, suggesting a more nuanced influence. The challenge for advisers is ensuring their credibility and value remain visible to younger audiences. 

Filling a gap in financial engagement 

Finfluencers are responding to a gap in financial literacy and confidence. Many young consumers face an overwhelming volume of financial information, causing many to struggle when distinguishing which sources are credible.  

In this context, finfluencers can appear as a source of clarity and community. Social media platforms have enabled the creation of online investment communities, where individuals can share insights, discuss trends and learn from one another. Notably, LinkedIn has emerged as a leading platform for younger investors seeking financial content, alongside more informal channels such as TikTok. 

This highlights the need for a more consistent framework when it comes to evaluating financial advice. Whether delivered by a regulated adviser or a social media influencer, advice should be subject to the same scrutiny, including the evidence it is based on, the assumptions it relies on and any potential biases shaping it. 

Benefits and risks 

While the risks associated with finfluencers are clear, their impact is not entirely negative. By simplifying complex topics, they are helping increase awareness of investing and are encouraging participation among younger audiences. 

However, this accessibility comes with significant challenges. Questions around qualifications, transparency and accountability remain unresolved, and the line between education and advice is still blurry. 

The fraudulent and misleading content targeted by the FCA is also a breach of social media platform policies. As a result, the FCA is increasingly calling on platforms to enforce their own standards more effectively to limit the spread of unlawful financial promotion. 

Finding an influential balance 

For financial institutions, the question is no longer whether finfluencers matter, but how to engage with them responsibly. That means treating them as a channel requiring the same rigour, oversight and compliance as any other financial promotion. Those that find the right balance will be better positioned to build relevance and credibility with younger investors.