Social media has made personal finance something of an entertainment spectacle. Scroll YouTube, TikTok or Instagram, and you will see an endless stream of “finfluencers,” They will promise you quick wealth, secret investment strategies or passive income. Some creators want to educate others, whilst many are overconfident, misinformed, or outright deceptive. For those people looking to make smart financial decisions, it can be challenging to know how you can tell the difference? Spotting bad financial advice has become an essential digital skill.

Oversimplification 

The first red flag to look out for is oversimplification. There are many nuances to real financial planning – your income, goals, risk tolerance, tax situation and timeframes all matter. This complexity is ignored by bad finfluencers. They offer a one size fits all solution, such as “Just invest £100 a week and you’ll retire early” or “This crypto will 10x by summer.” When the advice being given sounds universal, then it’s usually unreliable. Good educators take time to explain tradeoffs, risks, and alternatives. Bad ones pretend these don’t exist.

Guaranteed returns

We would all love it if guaranteed returns was a given. However, no qualified financial professional will offer you un-guaranteeable promises like you will never lose money, your investment will double. Markets fluctuate and there are risks linked to all financial products, even those termed “low risk.” If someone claims their methods or foolproof, then they are either misleading people or are inexperienced. The more confident a promise the more cautious people should be. 

Lack of transparency

Affiliate links, sponsorship, and commission, these are the ways many finfluencers earn. This isn’t inherently wrong, however hiding it is. If a specific trading platform, credit card, or investment product is being pushed, without financial incentive being clearly declared then that is an issue. Ethical creators are upfront about how they make money. Unethical ones pretend they’re just being helpful.

High-risk strategies

Be careful about any high-risk strategies that are presented as being beginner friendly. Speculative crypto projects, forex and day trading are sometimes marketed as easy get rich schemes. However, the reality is they carry significant risk and require expertise. If someone claims you can trade from your phone and quite your job, they are peddling fantasy rather than financial literacy.

Offering lifestyle as proof

This is another common tactic, flashy cars, luxury holidays and designer clothes are all things that are used to imply that the financial strategies of a creator work. However, this is not proof, a number of influences rent or borrow props or money to appear successful. When aesthetics are used over data it is a clear sign, they are not selling insight but rather an image. 

Lack of credentials 

A far more subtle red flag is lack of credentials or lived expertise. It isn’t necessary to have a finance related degree to offer helpful money tips. However, you should have experience and research or at the very least a track record of accuracy. It a creator is unable to explain where their knowledge stems from then it is best to avoid. 

Trust your instincts and avoid advice that triggers urgency which is a classic pressure tactic. Good financial advice will always be measured, calm and consider long-term thinking.