There are many finfluencers that use their personal experiences to educate others. That can bear weight, as long as it’s responsible advice, says Alyssa Davies from Mixed Up Money.Todd Korol/The Globe and Mail
How to slay the stock market. How to retire early. How to be rich. How to get out of debt.
These are just some of the pitches that financial influencers, or “finfluencers,” promise with their online courses, which can range in price from $25 to $1,000-plus.
As more content creators branch out into additional revenue streams, an increasing number of digital courses, webinars and pay-for-access community groups have popped up.
A recent Ontario Securities Commission survey found that while many people are skeptical of finfluencers, when someone finds a voice they trust, they tend to listen to them. The survey said 35 per cent of retail investors made a financial decision based on advice from a finfluencer.
Investors want advice in a volatile market. ‘Finfluencers’ are trying to fill the gap
While finfluencer content can help improve financial literacy, not all advice is created equal.
“There are people doing good work out there, so it doesn’t mean you have to avoid it completely,” said Errol Osecki, an assistant professor of accounting at the University of Ottawa who is researching finfluencers. “But be careful and a little bit skeptical when you go into these things.”
So how do you know if a finfluencer’s course is worth the cost?
See if the content resonates
When deciding whether to take a course, see if the tone and subject matter resonate with you and your financial objectives.
You also want to be clear about how you like to learn. Is the course live or prerecorded? A single session or multipart? Can you ask the instructor questions?
Edmonton-based Sharizah Sculley has taken a few online courses from various providers, including ones on investing and debt repayment. She enrolled in an “investing for beginners” workshop offered by Alyssa Davies of Mixed Up Money because she said the content was accessible and non-judgmental.
Ms. Davies says personal finance course providers should be transparent about what they know and how they know it, what their course offers and how they earn an income.Todd Korol/The Globe and Mail
As a result, she developed the habit of investing each month – even with small amounts of money.
The courses she has taken have also helped fill personal knowledge gaps, she said, as she wanted more control over her finances after taking out student loans.
“In high school we had a class where you were given an income, a job, were told if you have kids or not and had to [create] a budget. That’s pretty much the only finance I remember learning in school,” Ms. Sculley said.
Richard Coffin, the founder of personal finance YouTube channel The Plain Bagel and an investment analyst for an Ottawa-based wealth management company, said there can be value in online courses, as long as they’re offering tangible learning objectives versus vague promises, such as “financial freedom” or “high returns on investments.”
“You have to be careful when promises start to veer more into the ‘get rich quick’ type of offerings,” he said.
Check qualifications
The OSC report found that finfluencers typically fall into three categories: unregistered individuals, unregistered individuals hired by financial firms and registered professionals.
Mr. Coffin said people should think critically and ask themselves questions before taking an online course. Are there additional sources backing up the information this person is telling me? Is this person qualified to be offering this advice? What are their motives or conflicts of interest?
He advises checking qualifications or designations a course provider has before enrolling.
There are many finfluencers that use their personal experiences to educate others. That can bear weight, as long as it’s responsible advice, said Ms. Davies, a personal finance writer, content manager and founder of Mixed Up Money, who started writing about her financial journey while managing debt.
Just because a finfluencer offers a course, there is no guarantee that it will solve someone’s financial woes, ‘because so much of finance is doing the work yourself,’ Ms. Davies said.Todd Korol/The Globe and Mail
She said personal finance course providers should be transparent about what they know and how they know it, what their course offers and how they earn an income.
“A lot of times we conflate credentials with competence, but I think experience and integrity matter just as much,” she said.
Mr. Coffin agrees that first-hand experience can be valuable in certain instances. A person who lifted themselves out of debt may be equipped to share budgeting advice, for example, but that doesn’t mean they are the right person to offer a course on day trading.
“The more advanced a topic is – when you get into stock analysis, stock trading, things like that – the more demand there should be for those credentials,” he said.
There are professional courses for similar, if not more competitive, prices than the ones finfluencers sell, he pointed out, adding that courses from more established institutions typically have larger teams and stricter quality controls than an individual content creator may have.
Think critically
Be aware of any paid promotions within a content creator’s financial advice. While working with a brand isn’t inherently bad, and is a way many finfluencers make money, they should disclose paid endorsements.
“Always understand what someone’s incentives and conflicts of interest are before taking their information to heart,” Mr. Coffin said.
Ms. Sculley said that when deciding to take a course, she reads reviews to see what others got out of the program, regardless of how reputable someone may seem.
Be realistic
Taking courses to improve financial literacy can not only destigmatize money and normalize tough financial conversations, it can also teach skills needed to make changes.
But no one is going to fix your money situation for you, Ms. Davies said.
“If someone’s offering a course, you have to accept the reality that there is no guarantee because so much of finance is doing the work yourself,” she said.
“Your budget isn’t going to be automatically fixed because you spent $300. You actually have to sit down and take the time to do that.”