No reliable knowledge from the online investment advisors
Beware of influencers!
Good advice does not always have to be expensive: the Internet is teeming with investment tips and other financial advice. However, it is important to exercise the necessary caution.
Published: 17 minutes ago
Updated: 6 minutes ago
More and more users are also getting financial and investment information from social media. A healthy skepticism is appropriate.
«Google knows everything». This common opinion means that more and more people with an illness first try to find out for themselves on the Internet what is wrong with them. Many online health guides, some of them dubious, take advantage of this.
There is something similar in the financial world. So-called “influencers” – the word is made up of “finance” and “influencer” – offer advice for small investors in videos and stories. It explains free of charge which investments are currently worthwhile, which financial issues are currently important, or sometimes simply “how to make millions quickly”.
It is enough to search for “invest money” or “understand finances” on Instagram. The choice is large. Often there are accounts with a few hundred followers, but sometimes also those with tens of thousands. Many have one thing in common: posts with motivational slogans, bullet points on how to lead a “more successful life” or tips on what to do when investing. You can also find masses of videos with well-meaning investment advice for every search entry on YouTube.
No reliable knowledge from the advisors
Without lumping everyone into one pot: caution is advised. Examples of dubious influencer content abound. The “Handelsblatt” examines a case in which investors lost a lot of money via Velvet Autoinvest. The platform uses artificial intelligence to help with automatic investing – but apparently not only with success. Other media make fun of the swanky behavior of some influencers.
The NZZ shows that some of these influencers do not give independent advice, but praise very specific platforms. For this they receive commissions.
The expertise of the influencers is not checked anyway. According to the NZZ, many of the influencers are self-taught. These do not have a title that proves a special education. However, they often achieve a large reach, especially among the younger generation.
Because they are definitely interested in investment topics. According to a study by the Lucerne University of Applied Sciences and Arts and Postfinance, 33 percent of all those surveyed from the years 1997 to 2004 used social networks to find out about investment decisions. The picture is shifting: instead of gullible pensioners being deprived of their pension funds, gullible young people who are willing to invest are now increasingly being targeted.
Education is everything
Anyone who nevertheless engages in online investment advice should heed the following points:
- Does the influencer have the necessary expertise? In Switzerland, it is possible to check whether a specific person is entered in the advisor register or has an asset management license. Always assuming that it is known at all who the person advising is.
- Is pressure exerted during the consultation? Pushing for a certain investment is usually suspect.
- Are there any indications that the adviser is pursuing certain interests? Dependence on companies and institutions does not allow independent advice.
- It is always worth consulting several alternative sources.
Incidentally, some influencers integrate disclaimers into their posts. It is pointed out that these are only for information and entertainment purposes, but are not investment advice in the legal sense. Professional advice is preferable. Basically, a sound, verifiable financial education should always be a prerequisite for the advisor. (rae)