We are more likely to follow financial losers
Financial influencers, also known as finluencers, have become the subject of research. The results are shocking — we like those who lead us to losses with their advice the most.
You’re causing damage, but I still like you
Finfluencers whose advice is useless or even highly harmful tend to have significantly more followers than profiles with solid financial advice. We listen to their advice more willingly… because they have an optimistic approach.
The Swiss Finance Institute conducted a study, reporting that only 28% of influencers give advice with a chance of a positive return on investment, 16% of advice has no value, and a whopping 56% of advice will inevitably lead to losses. The average monthly loss of advice from unqualified financial influencers is 2.3% of invested capital, but they still have more followers than their colleagues who are familiar with finance topics.
The study was not conducted on a small sample size — the authors analyzed as many as 29 thousand accounts on X (formerly Twitter). The reasons for this phenomenon are given as the fact that influencers are not obliged to provide accurate advice. They do not necessarily have to be right to retain their followers. Additionally, retail investors, instead of focusing on cool calculation, look for influencers who have similar behavioral traits.
How to recognize a worthless finluencer?
Tweet frequency, tone, and follower count are important indicators here. According to researchers, fewer followers and posts are typical features of an account with reliable advice. In addition, malicious profiles usually they follow market sentimentmeaning they tweet positively after a spike and negatively after a drop. Skilled influencers often do the opposite.
Then there are the influencers who offer no rebates — that’s 16% of the pie. Their warning signs could be active accounts with few likes, promoting too many ideas, or focusing on hot deals.
