A 2024 study by finance site MoneySmart shows that two in five Singaporeans have made investments based on financial advice doled out from social media. Almost half of these respondents also follow specific finfluencers, such as Singaporean entrepreneur Adam Khoo and American investor Warren Buffett.

This shift in preference for finfluencers is mainly driven by three factors:

1. Increased accessibility

The digital age has accelerated the rate and ease with which we get information. We can now access almost everything at our fingertips with a simple search.

This has given the finance sector, especially investors, the advantage and flexibility to access financial content at their own time and pace, according to a study by non-profit finance organisation CFA Institute.

The presentation of financial advice – in bite-sized, one-minute videos – and the communication style of its presenters also play a part. Finfluencers repackage complex and dull source material into a fun and engaging experience, all while coming across as candid and relatable to their audience.

2. Finfluencers foster community

Learning the basics of investing, budgeting, and saving can be daunting for many. In recent years, finfluencers and social media have become integral to the new investors’ manual.

What sets them apart from traditional finance professionals is the sense of trust and community they foster. For example, some finfluencers have set up Telegram channels for their followers, amassing thousands of subscribers. This offers a more personalised interaction, where finfluencers answer queries and organise meet-ups with their community.

Having a community to rely on has been helpful for many investors, with a 2023 Forbes study noting that 62 per cent of investors feel empowered by their access to more financial information on social media.

3. Free advice 

The lack of disposable income among younger investors often deters them from seeking paid services offered by finance professionals. As a result, the finfluencer, who provides free financial advice via social media, has become a popular choice.

But it is important to tread with caution. Not all finfluencers are professionally trained and may dole out poor-quality advice or even misinformation. With advice posted on social media delivered in bite-size, the advice is often surface-level and may not adequately represent the risks involved in investments.  

In response to the rise of finfluencers, the Monetary Authority of Singapore (MAS) has issued regulations so that those who give financial advice have to be licensed and regulated under the Financial Advisers Act, helping investors seek proper financial guidance on the internet. The regulator has also implemented a set of guidelines for financial institutions that employ financial influencers. Nonetheless, the onus is always on the viewer to take discretion. Always check and cross-reference with other sources, especially official ones.