Tempted by unqualified finfluencers and social media investment ads? Here’s why it’s a bad idea

Most of us spend a large part of our day online and that is also the place where unqualified finfluencers hide and scammers try to get you interested in social media investment scams that can leave you broke overnight.

Tempting online adverts offering unrealistic investment returns are all over social media and many of these schemes operate without oversight, exploiting gaps in regulation to appeal to desperate consumers who want to grow their savings quicker than traditional and safer methods allow.

Unqualified brand ambassadors and “finfluencers” who promote these financial products as personal recommendations without any skin in the game are becoming an even bigger scourge, Johannes Theron, COO of distribution at PSG Financial Services, says.

“The issue is that social media influencers are paid for their endorsements, but their followers often mistake these promotions for genuine, first-hand financial advice. This creates a dangerous dynamic, blurring the line between unbiased guidance and deceptive marketing.”

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Advice from unqualified finfluencers

Theron says even if an influencer shares recommendations based on their personal circumstances, advice and recommendations around financial decisions and products might not apply to you as no two people have the same financial circumstances and goals.

While some schemes are more sophisticated than others, Theron urges prospective investors to exercise caution and be on high alert for these warning signs:

• Unrealistic returns: promises of high rewards with minimal or no risk.
• Pressure to act quickly: tactics designed to create urgency and push you to make instant decisions.
• Lack of credentials or transparency: advisers or brand agents without qualifications, regulatory licences or ties to reputable financial institutions try to sell you financial products and investments.
• No independent verification: Limited background or client reviews, or an abundance of overly glowing reviews that appear to be bot-generated or unusually similar.

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Social media investment scams

“Scammers exploit emotional appeals and misinformation to lure their victims. At the end of the day, the key to protecting yourself is to remain sceptical of any offers that seem too good to be true. Unfortunately, once you have fallen victim to a scam, it is often too late to recover your money and therefore it is crucial to avoid rushing into decisions and always question unsolicited or pushy offers,” Theron says.

To avoid falling victim to unregulated schemes or scams, Theron recommends working with credible advisers who can demonstrate affiliations with established financial bodies and have a proven track record of ethical conduct.

“Professional advisers are vetted and trained to offer tailored advice based on your individual financial goals and risk tolerance. While these advisers will certainly be able to guide you in achieving your financial objectives, they would never rely on pressure tactics and unrealistic promises.”

With good financial advice, the focus must remain on understanding each client’s unique financial circumstances and goals.

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Rather listen to a legitimate expert than a finfluencer

Theron says amid the incessant noise of social media and the allure of quick returns, being able to distinguish genuine opportunities from deceptive schemes is becoming a critical part of building long-term wealth.

“When making decisions regarding your finances, ensure that you speak to an accredited financial adviser who will empower you to make informed decisions and prioritise safeguarding your financial future.”