Gen Z has decisively turned toward social media for financial advice. What are the promises and pitfalls of meeting them there?
Our eye was recently caught by recent reports that influencers on social media platforms like TikTok are now the second most popular source of financial advice for Gen Z. A whopping 36% of British under-25s now report they get their guidance on saving, investments and more from financial influencers or ‘finfluencers’, who come second in popularity only to their close family members.
They grew up alongside emerging tech giants like Facebook, YouTube, and the iPhone, all of which launched in the mid-2000s. That’s why it’s natural that Gen Z is almost five times more likely to seek financial advice on social media than adults aged 41 and over .
Good communications means going where the people are (even financial giants tiptoe into TikTok ) – so what considerations do we need to take into account as we incorporate this increasingly popular new channel into our strategies?
First, the bad stuff. Social media and the finfluencers on it are totally unregulated, which usually isn’t a big deal for a fashion brand – but it gets more serious when we factor in that the products being sold can entail significant and potentially life-changing risks. Cryptocurrency booms come and go, but one constant has been social media being abused by some of crypto’s malicious actors, who can be happy to take advantage of a large, generally young audience who may not have the technical knowledge – or healthy scepticism – to spot a dodgy prospect when they see one. Even non-crypto content can often not be clearly labelled as an ad, and there are no standards on social media for ensuring the complexity of a product matches the sophistication of the audience. And, of course, there are always good old-fashioned scams out there, as there sadly always will be.
So, with the (admittedly pretty heavy) caveats, how can communicators work well with finfluencers?
The key consideration here is that it will be a partnership, in a model that combines some elements of working with a spokesperson, and some of working with an editorial title all of its own. Here’s what we suggest:
1. Identify relevant partners
Exactly like working with a spokesperson, you need to choose the right one. You should conduct thorough research to identify finfluencers whose values and (audience) align with what you’re promoting. Quality can also vary wildly, and it’s not a field short of bullshitters, so examine their content carefully, look for strong engagement rates, real expertise, and a track record of producing high-quality material.
2. Build authentic relationships
One of the virtues of influencers in any field is that, instead of seeing the process as purely transactional, they’ll generally be looking for a sincere and authentic relationship. You’re not just wheeling and dealing for coverage, they’ll want a relationship that reflects well on their own personal brands, offers value beyond the tangible, and offers mutual benefits. Anyone who has worked with influencers will tell you that some can be… idiosyncratic.
3. Set clear objectives and expectations
Part of this idiosyncrasy is that you may not be working with an operation as slickly professional as you’re used to. You should clearly define the objectives of the collaboration and communicate your expectations with the influencers, contractually if need be.
4. Provide creative freedom
Remember you’re slotting into a relationship the finfluencer has built with their audience. This has grown based on the style and formats of content they have already developed. You should take care to not micromanage the content creation process: they know their audience best, and they know what content will get results.
A lot of this is common sense – so what are the benefits of making this relationship work?
The reach of finfluencers is enormous – at the time of writing, the hashtag #fintok has been viewed more than four billion times on TikTok. The right post at the right time with the right content and message can pay off handsomely. The credibility and trust they enjoy among their audience is enormous, and it can offer enormous rewards given the authority and authenticity of the messages they can deliver. And it’s not insignificant that they can take over all the content creation and distribution work, and the good ones can do it well, and in styles that will resonate with a young audience far more than older creatives trying their best to seem cool.
Those are the pros – what about the cons?
Beyond the far-from-zero risk of choosing the wrong finfluencer wrapped up in the caveats we mentioned above – the dangers of which should be clear – there is also an inherent sacrifice of control in messaging. This is the price you pay for borrowing their authenticity – a degree of simply not knowing exactly how your client will be presented. Finally, there can be challenges in measuring ROI, and no matter how much they don’t want a transactional relationship, the biggest finfluencers won’t come cheap.
So, that’s our whistle stop tour of the concepts and considerations you need to think about before working with financial influencers. One thing is certain: the cohort that favours them now is unlikely to suddenly lose interest when they hit 25, or 35, or 45. Like it or not, it’s hard not to see a world where the finfluencer isn’t here to stay.
