The Rise of Finfluencers and the Risk of Financial Scams: A Call for Action

In the era of always-on connectivity, finance has gone social — and that shift has come with dangerous consequences. Enter the finfluencer: a new breed of financial influencer, often unlicensed, who uses social media platforms to promote investment advice, financial products, and wealth-building strategies to thousands — even millions — of followers.

While some offer legitimate guidance, many operate with no formal training, no regulatory oversight, and no accountability. From Instagram crypto schemes to WhatsApp property “insider groups,” finfluencer-driven scams are now one of the fastest-growing financial threats globally, and Asia-Pacific is right in the crosshairs.

What Are Finfluencers — And Why Should We Be Concerned?

Finfluencers are individuals who use digital platforms — including LinkedIn, YouTube, Telegram, Facebook, and TikTok — to share content that appears to be investment advice. Their posts often include stock picks, cryptocurrency endorsements, real estate opportunities, or testimonials about passive income streams.

Some finfluencers are qualified finance professionals. Most, however, are not — and many intentionally blur the line between marketing and manipulation. With slick visuals, fabricated testimonials, and "wealth-lifestyle" content, they lure in trusting followers who believe they’ve found the secret to financial independence.

In 2024, the UK’s Financial Conduct Authority (FCA) identified over 25,000 unauthorized financial promotions, many originating from these finfluencers.

That figure is likely to understate the problem in Southeast Asia, where WhatsApp, Telegram, and local-language Facebook groups serve as unregulated channels for cross-border financial promotions — many of which are scams in disguise.

Real-World Examples: How Finfluencer Scams Are Unfolding

1. Crypto Hype Turns Criminal

A popular TikTok finfluencer in the Philippines promoted a new token “about to 10x.” Within days, thousands of retail investors had poured in money — only to discover it was part of a pump-and-dump scheme. The coin’s creators vanished, leaving wallets drained.

2. LinkedIn Real Estate Deals That Don't Exist

On LinkedIn, “mentors” offer VIP access to “off-market” developments in Bali, Manila, or Bangkok. These promotions include glossy brochures and fake testimonials — but when investors wire funds, the projects disappear. Local authorities are often helpless due to offshore incorporation and shell companies.

3. WhatsApp Investor Groups

Across Malaysia and India, finfluencer-run WhatsApp groups promise daily stock tips, high-yield lending pools, or forex signals. Often, these evolve into Ponzi-style schemes where early “returns” are paid from new deposits — until the admin disappears, and the group is deleted.

Why APAC Markets Are Especially Vulnerable

Several regional dynamics make Asia-Pacific a hotspot for finfluencer fraud:

• High mobile penetration and social media usage, especially among Gen Z and millennials.

• Cultural deference to perceived authority figures (even self-appointed ones).

• Limited cross-border enforcement capacity among regulators.

• Growing wealth in underserved financial literacy markets, making novice investors easy targets.

In countries like Vietnam, Thailand, and Indonesia, entire financial advice ecosystems now operate on Telegram channels, Instagram “mentorship groups,” and WhatsApp broadcasts — with little to no oversight.

The Regulatory Response: Some Action, Not Enough Reach

Global regulators are beginning to push back:

• The FCA is prosecuting unlicensed financial promotions and banning influencers.

• In Australia, ASIC is cracking down on financial promotions by social media personalities.

• France’s AMF has launched campaigns warning against investment advice on Instagram and YouTube.

But in Asia, enforcement remains inconsistent. Regulators in Singapore and Malaysia have issued public advisories, but enforcement actions remain limited. Meanwhile, India’s SEBI has warned finfluencers not to offer financial advice without a license — yet Telegram and YouTube channels promoting “free stock tips” continue to proliferate.

The Role of Platforms and Telecoms: Time to Step Up

Social media platforms and telecom providers are not neutral hosts in this ecosystem. Their technologies enable and amplify financial misinformation. That comes with responsibility.

Here’s what needs to change:

1. Mandatory Financial Product VerificationPlatforms must require influencers promoting investments or financial advice to prove their licensing status before posting.

   
   

2. Smarter Content ModerationUse AI-powered monitoring to detect and take down unauthorized financial promotions — especially when keywords like “guaranteed returns,” “crypto pump,” or “early access IPO” are flagged.

   
   

3. Report and Remove MechanismsTelecoms and platforms should make it easier for the public to report suspicious groups, messages, and users.

   
   

4. Data Sharing with RegulatorsCross-border cooperation between platforms and financial authorities must be formalized — especially for scam tracing and evidence preservation.

A Multi-Stakeholder Call to Action

✅ Regulators:

Strengthen licensing enforcement, ban unauthorized financial promotions, and collaborate internationally to tackle cross-border digital scams.

✅ Social Media Platforms & Telcos:

Build in financial content verification, improve detection algorithms, and share real-time data with regulatory bodies.

✅ Public Education:

Run nationwide campaigns on how to spot a financial scam, verify influencer credentials, and report suspicious accounts.

✅ Financial Institutions & AML Teams:

Incorporate “finfluencer exposure” as a risk vector in onboarding and transaction monitoring. Spike in transfers to wallets or investment platforms promoted via social media? That’s a red flag.

Conclusion: Finfluencers Are Here to Stay — But Fraud Doesn’t Have to Be

The rise of finfluencers is an inevitable result of digital finance and democratized content. But with influence comes risk — and in the world of unregulated financial advice, it’s often the vulnerable who pay the highest price.

At TrustSphere, we believe protecting consumers and investors requires a coalition of action — across regulators, technology platforms, telecom providers, financial institutions, and the public.

Because in the end, financial trust is built on transparency, accountability, and verified guidance — not viral videos and false promises.

Let’s work together to turn this tide.