Queenie Tan is a 25-year-old marketing manager turned “finfluencer” – someone who has taken to new media sites like TikTok to dispense financial wisdom.
She has an enviable following of 66,000 on TikTok, and even has a video explaining where her money comes from. What she doesn’t have is any formal qualifications in financial advice.
Queenie and her colleagues – and there are now thousands of them – have split the world of financial advice, with many denouncing “fininfluencers” as dangerous, as more and more young Australians, spurred on by the pandemic, take to investing online and unadvised.
Indeed, so much is the concern that The Australian Securities and Investment Commission ASIC is now looking into regulation and even TikTok, a site designed for many liberal forms of marketing, has signalled some concern.
ASIC Commissioner Danielle Press says unlicensed financial and investment advice is a topic the regulator is monitoring “very closely and considering”, particularly if the individual was recommending a financial product.
Minister for Superannuation, Financial Services and the Digital Economy Jane Hume, perhaps surprisingly, says people like Queenie are “Generation Z’s Paul Clitheroe or Scott Pape.”
“The TikTok influencer spruiking Nokia is not that different to the bloke down at the pub who wants to tell you all about the really great company he just invested in — but with a much louder voice,” she says. “This isn’t financial advice, but as has been the case since taxi drivers started giving stock tips, it is an inevitable part of a financial ecosystem.”
Queenie would certainly agree. She is now making a full-time living off sharing her knowledge with others.
“I think there are so many young people that have no idea that there is stuff out there they can use. People have no idea they can start investing with $5, there are apps out there that can do that.
“I thought you needed to be really rich to start investing and it was something I’d never be able to do. People need to know about these things.”
She sees her content as an easier way for younger people to engage with financial topics.
“What 20 something is going on the government website and checking out for new things, nobody’s looking for this information. But if it pops up on their TikTok feeds then yeah, they’re going to listen, people want to know this stuff.”
She does not see herself as an alternative to professional financial advice, but rather sees herself as providing “generalised financial education.”
“With a financial adviser, they really understand you. They know how much money you have, they know what your financial goals are, how old you are, what your risk profile is, they know all these things about you. Then they will come up with a strategy based on that.
“Whereas a content creator is just putting information out there.”
“It’s saying things like ‘hey did you know about the first home buyer super saver scheme, that could be something worth looking into.’ It’s not saying, ‘hey I know everything about you and I think this is what you should do with your money’. It’s more about giving people information and tools so they can do their own research.”
Ms Tan warns consumers to look out for other fininfluencers who rather than providing general education, seem to be nudging you in a certain direction.
“I think one thing to be mindful of is try and see if they’re trying to push you in a certain direction. Are they telling you ‘just invest in crypto’ or ‘this crypto coin is going to rise tomorrow’, if they’re trying to move you a certain way rather than looking at the pros and cons, then I would be very wary.”
However, above all for Ms Tan in how she maintains her own credibility and recommends you to assess the credibility for others, is the transparency of where the money is coming from.
“Be wary of people who aren’t very transparent about how they make money online.”
“Now that this is my full-time job, I make anywhere from $3000 to $5000 a month. Every couple of months I release a video and I go through how much money I made from the past couple of months. For example how much I made from affiliates this month, how much from youtube ads this month and so on.”
“I’m very transparent about how much money I make, when something’s a paid sponsorship and when something’s an affiliate, so people know the reason why I’m promoting it.”
“Whereas some people they might just say ‘hey buy this crypto coin’ and they don’t say that maybe they have heaps of these coins already or have been paid by that company to promote that coin and they’re just not disclosing it.”
“I think people need to be careful about people’s ulterior motives like are people saying this just to make a profit or are they trying to give a balanced view and give you all the information that you need.”
Dr Angel Zhong is a senior finance lecturer at RMIT and a regular commentator on the finfluencer space. Dr Zhong says that she understands the gap that finfluencers fill, but recognises plenty of risk as well.
“Young investors are inexperienced and hungry for financial knowledge, however, it’s very costly to obtain financial advice in Australia. Finfluencers fill this gap to provide generic knowledge and they do enhance financial literacy in Australia.”
Dr Zhong recognises that more stock activity equals more growth and this is a positive, but is also weary of the misinformed or corrupt behaviour of many finfluencers.
“There are a lot of finfluencers encouraging risky behaviour, for example some of them encourage day-trading which is highly risky. Some influencers also encourage the risky ‘pump and dump’ method of investing in crypto or even encourage followers to borrow money to invest in crypto, which is very dangerous behaviour.”
“Even for finfluencers providing generic information, you don’t know. If you don’t have financial knowledge then you don’t know if that is correct or not.”
In terms of what to check when assessing if social media advice is credible, Dr Zhong says: “The popularity of a finfluencer doesn’t correlate to their credibility. Check if this person has a background in finance, if someone is talking about finance and the stockmarket without any background in finance, I would be a bit more sceptical.”
What next?
While the advice from Dr Zhong is to look out for the transparency and background of the finfluencer, as well as the subject matter of the given advice, this does ask the question of why the finfluencers providing high-risk or reckless information are allowed to continue.
Dr Zhong says more regulation would be welcome.
“It’d be great for our government agencies, for example, ASIC, to play a more important role in this since we are seeing so many finfluencers. I’ve been talking to finfluencers as well as young investors, both sides are not even sure whether there is even any regulatory guidance on if what they are doing is breaking the law.”
“It’d be great if ASIC issued some guidance to tell people exactly what finfluencers can and cannot do. For example, New Zealand’s equivalent of ASIC, Financial Markets Authority, actually recently released regulatory guidance in terms of what finfluencers can and cannot do.”
“So it’d be helpful if the government played a more important role in this, to protect the financial wellbeing of the younger generation in Australia.”
Ms Tan’s perspective correlates with Dr Zhongs, as she notes herself having to constantly “self-regulate” and ensure she isn’t doing anything misleading or illegal.
“It would be good to get more clarity from ASIC about what is and isn’t okay and how we can make sure we’re giving people information and being as helpful as possible.”