(F)influenced? #SocialTrading: Using social media for financial information and investing advice. Exploring the impact of financial influencers on young adults’ investment decision-making.
The dissemination of personal finance information by so called finfluencers has steadily been increasing in recent years. As young adults have grown up with digital technologies and use social media platforms daily, it comes to no surprise that they have adopted social media for gathering financial information and investment advice. In fact, the combination of different factors such as the recent Covid-19 pandemic, the easy access to financial markets through trading platforms and social media fueled investment hypes have caused the emergence of a new wave of young and inexperienced retail investors who have developed interest in investing their own money. While investing in different asset classes can help young adults to accumulate wealth over time, seeking investment advice on social media can be hazardous to their financial health as finfluencers tend to recommend high-risk investments and oftentimes do not have the proper financial education and experience to give financial recommendations. Thus, as younger people are said to be more susceptible to the opinions of others and are prone to follow the investment behavior and actions of finfluencers, this retail investment boom has raised concerns about unsafe and unsound investment strategies. Thus, the purpose of this research was to determine what role finfluencers play in the investment decision-making of young adults to assess whether using social media as a preferred financial information source is indeed a cause for concern. A total of 12 in-depth interviews were conducted with young adults ages 18-25 from eight different countries who use social media for personal finance purposes. The thematic analysis that was conducted on these interviews revealed that young adults only trust sources from verified financial experts. In addition, the qualitative data also revealed that finfluencers do not pose a risk to the financial wellbeing of young adults in this study. Quite the contrary, finfluencers guide and support young adults in their own investment decision-making process and give them perspective and a sense of direction. In effect, rather than being influenced, one can conclude that young adults are inspired by the investment ideas that finfluencers share and by their impressive track record in the investment field.
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|Media & Business|
|Organisation||Erasmus School of History, Culture and Communication|
Iliana Güntert. (2022, June 27). (F)influenced? #SocialTrading: Using social media for financial information and investing advice. Exploring the impact of financial influencers on young adults’ investment decision-making.. Media & Business. Retrieved from http://hdl.handle.net/2105/64972