The finfluencers shaping investment advice for the TikTok generation

Victoria Devine is one of a new breed of financial advisers who have social media smarts. She says figuring out your finances might not be sexy, but it’s vital.

The exit of thousands of financial advisers from the industry has opened the door for the “finfluencers” who have both social media smarts and enough educational credentials to satisfy the regulators.

Among them is Victoria Devine of the Zella group, who thrives as both an advice professional and a social media influencer. Devine is a qualified adviser and also has an MBA from Melbourne’s RMIT.

She is a popular podcaster, author of the investment book series, She’s On The Money, and hosts a weekend radio show on Kiss FM.

Working with a CV that manages to straddle both traditional advice and newer forms of media she has built a considerable audience.

Devine’s target group is millennial investors and the majority of her audience are young female professionals trying to get a handle on the complex – but rewarding – world of personal finance and successful asset allocation.

According to Devine: “Finance isn’t the sexiest thing but it can be simple…women face an ingrained culture not to discuss money.”

Special magazine in The Australian September 23

With sky high fees for face-to-face service, digital financial advice should have been the answer to many problems facing the sector. But digital didn’t emerge – or at least never in the shape many had expected. Traditional advisers have been challenged by digi-focused operators with off-the-shelf low cost solutions such as Stockspot or SixPark but we have no product such as those that have emerged in the US like Wealthfront and Betterment.

In fact, traditional financial advice remains dominated by market superpowers such as Morgan Stanley, Macquarie and a string of boutique firms.

Advice remains hinged upon a relationship with one person: that person might be on a Zoom call, but it remains a one-to-one correspondence with the investor paying at least $3500 a year.

Even so, younger investors are moving towards digital advice related services, and the shift accelerated rapidly during the pandemic.

Inside that shift are two big trends: The revival of online broking thanks to a surge of share market investment among young investors, and the arrival of the finfluencer as a social media phenomenon.

In dollar terms, the single most successful line of digi-finance has been in stockbroking, where millions of first time customers arrived to play the stock market during the lockdown periods. The upsurge in stock activity brought new names to the market such as Superhero, Stake and Sharsies. It also revived the fortunes of operators such as NABtrade and CBA’s Commsec.

Commsec alone has picked up one million new customers for its online broking services over the past two years, and the majority of them are under 35.

As the numbers grow, banks are reassessing their dramatic exit from financial advice after the Hayne royal commission unearthed a series of scandals in 2018.

Commsec has openly courted the youth market with its Pocket investing app. More recently it moved one step closer to offering financial advice with a digital service tagged as Stock’d and which offers market education services for young investors.

Meanwhile, far from the major banks, the other hotspot for digi finance over the past two years are the “finfluencers”. These are social media-focused personalities who have moved towards financial advice serving a young audience.

As the major brokers responded to the demand among younger investors for cheaper services during the pandemic, many finfluencers built a substantial following on Twitter, Instagram and Facebook.

At its peak when the market was red-hot in late 2021, influencers of varying ability could get little wrong as the sharemarket bounced higher.

Financial adviser representative groups did not miss the action, with The Adviser’s Association chief executive Neil Macdonald publicly warning that it was “extremely unfair that well-qualified, experienced, professional advisers have to go through so many more hoops than finfluencers to provide similar information and education”.

But the Australian Securities and Investments Commission made some quick and dramatic moves against finfluencers, warning them of jail if they gave advice without a licence. By late 2022 the finfluencer phenomenon appears to have faded, with many colourful characters vanishing from the scene, and making way for those with qualifications and credibility.