Influence of Social Media Influencers
The occupation of “Social Media Influencer” is a fairly new occupation that describes an individual that makes their living through posting on social media, and that posting influences other individual’s habits. The income can be derived from a variety of sources, from direct donations, to corporate sponsorships, to merchandise sales. The more followers, or fans, an individual has on their social media platforms, the more they will be compensated for showcasing a product or service on social media. Corporations often will compensate individuals for appearing with their product, or using their product while posting or participating online. Nearly every industry has influencers, and the financial industry is no exception.
These influencers can be found on a variety of social media platforms such as Facebook, Instagram, Twitter, and TikTok. Obviously investors who are more likely to use social media platforms are also more likely to be influenced by an influencer. Spectrem Group recently conducted research with wealthy investors on their usage of social media and the impact of financial social media influencers on their lives. According to Spectrem Group, only eight percent of investors indicate that their financial advisor creates videos on TikTok, however over 40 percent of Millennial investors have a financial advisor that creates videos on TikTok. Spectrem Group also found that only eight percent of wealthy investors follow any financial influencers on TikTok, Instagram, or other social media platform. That percentage jumps up to nearly a third among Millennials however.
Just over 10 percent of investors would follow or have followed an influencer’s suggestions regarding finances on TikTok, Instagram, or other social media platforms. Millennials are again far more likely to be willing to do this, with 39 percent indicating they would follow or have followed the suggestion of a social media influencer. Some of this willingness comes from being more comfortable with social media platforms and the individuals on those platforms, while another component could be a lack of industry knowledge that leads to trusting knowledgeable experts on platforms the investor is comfortable with.
This industry and concept of social media influencers is very foreign to investors who do not regularly participate on social media platforms that lend themselves to influencers. These platforms, and the influence the individuals have who participate on these platforms, are likely to continue however, so it is important to be aware of the impact these individuals have on the overall financial fabric of our country.