More than a third (35%) of Canadians have made a financial decision based on advice from a finfluencer, according to the Ontario Securities Commission (OSC).
The ‘Social Media and Retail Investing: The Rise of Finfluencers’ report found that retail investors are drawn to financial advice on social media because they see it as accessible, free, and informative.
Although the report found that retail investors believe finfluencers are often motivated by self-interest, this does not appear to undermine trust as 40% of investors consider the finfluencers they follow to be trustworthy.
In fact, investors who have acted on finfluencer advice are seven times more likely to trust the finfluencers they follow.
In addition, investors who acted on finfluencer advice were 12 times more likely to have been scammed on social media. According to the report, this suggests that trusting and following finfluencers may make investors more vulnerable to social media scams.
The report also involved an online experiment involving Canadian social media users — both investors and non-investors — to examine the influence of finfluencers and ways to counter misinformation.
Nearly 40% of participants who saw finance-related social media posts went on to purchase the promoted assets, compared with around 10% of those who were not exposed. Non-investors were more likely to be influenced by the posts than existing investors.
Leslie Byberg, executive vice president of strategic regulation, at the OSC said: “Finfluencers have a clear capacity to affect their audience’s behaviour, and this influence could diminish retail investor well-being – especially if the advice is poor quality.”
The findings come as the UK’s Treasury Committee prepares to hear evidence from the Financial Conduct Authority (FCA) as part of its inquiry into finfluencers at a meeting on 30 April 2025.
Steve Smart, joint executive director for enforcement and market oversight, and Lucy Casteldine, director of consumer investments, will give evidence.
This follows a targeted FCA crackdown in October 2024, when 20 finfluencers were interviewed over concerns they may have been promoting financial products illegally on social media.