Financial influencers or Finfluencers create digital content about personal finance, investment, retirement plans and more. They may be unregistered individuals working independently, unregistered individuals who are employed by financial companies or other brands as well as registered financial professionals.
While some Finfluencers provide reliable insights, others lack certificates or hidden incentives (such as gaining followers or earning commissions), which makes it difficult for viewers to assess the reliability of their suggestions. Finfluencer’s content (shown on a wide range of platforms like YouTube, Instagram, and Reddit) is often fast, free and easy to follow. It also carries significant risks.
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OSC’s social media and retail investment reports (produced in collaboration with the research firm’s decision lab) found that investors who make decisions based on Finfluencer content were 12.2 times more likely to be scammed and 2.3 times more likely to suffer significant losses.
Despite these risks, Finfluencers still have a high impact. Many investors express general distrust of this category, but they also report a high level of trust in the specific influencers they follow. Familiarity and personal appeal are often cautious.
“It’s a problem,” said Christopher Horkins, a commercial litigator for Cassels Brock & Blackwell LLP and a member of the Securities Litigation Panel. “Most people know that there is risk, but they still make judgments about the people they trust. Sometimes they do it right, sometimes they don’t.”
To help protect investors, OSC pointed out several strategies that can reduce the impact of misleading content. These include the need for clear disclosure and the use of tools such as “pre-shrub” (pre-emptive debunking) (also known as inoculation) that use warning messages to prepare people to spot bad suggestions before they can act on them. Before sharing suspicious suggestions, “naked” interventions can also help you by encouraging users to pause and verify information.
“Someone is definitely creating trustworthy content,” Hawkins added. “But it’s hard for the average person to tell who knows what they’re talking about and who just got paid for the promotional product.”
What rules must Finfluencers follow?
Canada has no laws specifically targeting Finfluencers (not yet), but this has not prevented regulators from using existing securities laws to pursue non-compliance. “We have seen regulators follow influencers who promote stocks without explicitly disclosing their salaries,” Hawkins said.
