Finfluencers Make Money Even When You Lose

A recent study revealed that a mere 2.2% of finfluencers surveyed held any verifiable financial qualifications, but their work has already gathered more than 692 million views. That's an attention-grabbing statistic, but it's not the one I think investors should focus on. More importantly, content labeled as deceptive averaged 555,547 views, compared with 326,170 for other videos. Thus, the false material received around 70% greater attention. That tells us something much more useful than the claim that "there are too many unqualified people talking about money online." It tells us what the system is rewarding us for qualified people talking about money online. It tells us what the system is rewarding.

Financial-licensing consultancy Legalaes reviewed more than 1,700 English-language posts across YouTube, TikTok, Instagram, and Facebook and classified 29% of the content as misleading. Around 42% of the YouTube videos examined fell into that category. You can look at those numbers and conclude that qualifications matter, and of course they do to a point, but I would be careful about reducing the issue to licensed versus unlicensed. I have spent more than 35 years around markets and have seen plenty of highly qualified people make terrible investment decisions. Credentials do not eliminate poor judgment. The more profound issue is that the people producing online financial content and the people acting on it are often operating under completely different incentives.

Finfluencers Are Paid for Attention, Not Investment Outcomes

If you manage money professionally, the market eventually forces accountability on you. You buy a stock at $50, and it trades at $28, and sooner or later somebody wants an explanation. Maybe the thesis changed, maybe the valuation was wrong, maybe management disappointed, or maybe you simply made a bad call. Whatever the reason, the position is still there in the portfolio, and somebody can mark it against you. That discipline matters because it ties the quality of the advice, eventually at least, to an economic outcome.

A finfluencer can work under a very different model. A creator can publish a video saying a stock is about to double, attract hundreds of thousands of views, generate advertising income, sell a course, collect subscription revenue, or earn an affiliate fee. The platform gets engagement, the advertiser gets exposure, and the promoter may get a customer. None of those people necessarily need the investment to work. The only person in the chain whose outcome truly depends on the advice being right is the investor who acted on it.