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Social media has become increasingly popular as a source for millennials and gen Z to learn about money. So-called “finfluencers” offer personal finance and investing tips to large followings on YouTube, TikTok and other platforms. While young people showing a greater interest in their financial well-being is a good thing, investors need to be careful about who they take advice from. So, where do advisors fit in?
Lindsay Hollinger, senior private wealth portfolio manager at Jarislowsky Fraser Ltd. in Montreal, said there’s an opportunity to contribute to the social media conversation.
Personalized advice often caters to wealthier people, she said. It’s hard for a young person or someone with less wealth to know how to start, who to trust and where to get the best information. Social media is accessible and can be a useful tool for advisors to educate the general public on financial literacy and minimize the spread of misinformation.
Christopher Dewdney, principal with Dewdney & Co. in Toronto, said most finfluencers don’t have the experience or qualifications to guide investors on what’s best for them, but there’s a significant gap in the market for affordable financial advice. The average age of financial advisors is now over 50, and he said most of them don’t target young people without a lot of money.
That leaves investors looking elsewhere for advice.
Hollinger said one of the reasons it’s difficult for the industry to be active on social media is because a lot of what advisors do is catered to a specific client. So instead of offering blanketed or oversimplified advice on social media, she recommends focusing on factual information about the basics of growing wealth.
“I think that information is not that complicated, and I strongly believe a lot more people deserve access to it,” she said. Hollinger posts videos on her personal Instagram explaining the basics of investing (defining stocks, bonds and diversification), how to determine risk tolerance and discussing attitudes toward wealth.
Her firm has been generally supportive and uninvolved, she said, but she makes it clear that everything she shares is her personal view and not that of her firm.
Ultimately, the industry needs to meet investors where they are, said Shiraz Ahmed, senior financial advisor and portfolio manager at Raymond James Ltd. in Toronto.
“People are learning all sorts of things in different formats,” he said.
But he said the regulatory framework is ambiguous, and regulated financial professionals have to be very careful with what they say, where they say it and who they say it to. And rightfully so. “These rules exist because our profession comes with a certain level of implied trust and the liability risk. There can be repercussions if someone makes an incorrect statement,” he said.
Advisors can use that to their advantage, he said, and he’s made it his personal mission to combat some of the misinformation online.
“Fight fire with water,” he said. “Go out there and really truly give the correct advice.”
Some firms are doing better than others to bridge the gap. With the support of his firm, Ahmed created a YouTube channel to share financial education content. Topics range from the difference between an RRSP and a TFSA to specifics around cross-border investing. He chooses topics based on common questions he’s encountered in his career, feedback from viewers and new developments like ChatGPT.
“It’s financial education, but in an entertaining way,” he said. “I want to be someone who brings that degree of credibility to some of these spaces.”
Aside from engaging clients where they are, Ahmed also sees social media as a way to generate leads and build his book of business. It’s helped establish him as a thought leader, he said, and opened new opportunities.
“Once you start to see that these mediums can deliver, they can be very profitable for your business,” he said. “All this happens because you’re doing the right things but doing it from a position of credibility.”