Finfluencers: Who are they, and what are the potential red flags?

At a glance:

  •  Finfluencers are social media content creators who share information about finance and investments.

  •  Their contents may be useful for learning purposes, but they do not constitute personalised financial advice and do not take into account your individual circumstances, objectives or risk tolerance.

  •  Investing based on recommendations from finfluencers is risky, no matter how persuasive they may be.

  •  At Carregosa NextGen, our specialist support will help you to make more informed and well-considered investment decisions.

All you have to do is scroll through TikTok, Instagram or YouTube to find someone explaining how to invest, which shares to buy, and what the next big market opportunity may be. While the content shared by finfluencers may be useful, it may not be suitable for you, nor necessarily accurate.

Find out more about finfluencers, and learn how to identify who is on the other side of the screen, what their interests are, and whether their advice really applies to your situation.

What are finfluencers?

"Finfluencer” is a portmanteau of "finance” and "influencer”, used to describe content creators who share information about money, saving, financial markets, and investments on platforms such as Instagram, TikTok, YouTube, and other social media.

Content can take many different forms, including educational videos on financial concepts, company analyses, opinions on specific assets, and recommendations on where to invest. Some creators simply share their knowledge or talk about their personal experiences. Others monetise their audience by using advertising, sponsorships, affiliate links, courses, or promoting specific products and platforms.

It is important to recognise that investment-related content is not the same as personalised financial advice. While a post may offer an opinion, analysis or investment idea, this does not mean that it considers your objectives, time horizon, financial situation or risk tolerance.

Furthermore, within the European Union, certain social media posts may be considered investment recommendations if they encourage the direct or indirect purchase or sale of financial instruments or specific investment strategies. In such cases, the Market Abuse Regulation (MAR) applies, which requires the identification of the person making the recommendation, a clear distinction between facts and opinions, and the disclosure of conflicts of interest. The European Securities and Market Authority (ESMA) has reinforced these obligations in notices addressed to those who publish financial content on social media.

Finfluencers: the key risks of unregulated information

Although social media can be a good place to start when it comes to learning, following a recommendation without checking its source can carry significant risks. Here are the main ones.

Lack of qualifications and supervision

Having a large following does not necessarily mean that you have the financial knowledge required to recommend investments. Anyone can create an account, present themselves as an expert and share their opinions on the markets, despite lacking the training and professional experience of a financial sector specialist.

The point is not to assume that all finfluencers are wrong. The problem is that there is no guarantee that the information has been produced to the same rigorous standards of methodology and supervision required of professionals and authorised bodies.

Conflicts of interest

A recommendation may not be as impartial as it seems. In some cases, finfluencers receive money, commissions, gifts or other benefits in exchange for promoting a product, company or platform. They may also have a financial interest in the asset they are promoting, and stand to profit directly if more people decide to invest.

This is why it is important to look out for transparent information regarding sponsorships, partnerships, and other commercial relationships. ESMA itself recommends clear disclosure of any benefits received and potential conflicts of interest.

Simplified or out-of-context information

In the world of social media, where everyone is competing for attention, establishing a strong presence is essential. The problem is that it is difficult to fit well-structured recommendations into a video lasting just a few seconds. This often means that key information is missing, such as the circumstances in which this would happen, the time horizon, the probability of that scenario materialising, and how much you could lose.

The same is true when only examples of gains are shown. Showing that a portfolio has risen by 30% does not necessarily reveal any previous losses, the level of risk taken on, or whether that result can be replicated.

FOMO (fear of missing out) and impulsive decisions

If you repeatedly come across content about shares, cryptocurrencies or trends that appear to be "skyrocketing”, you may feel pressured to act quickly for fear of missing out. Certain phrases can encourage you to make decisions based on emotion rather than rational analysis. This pressure can be particularly dangerous in financial markets.

Risk of fraud and unauthorised platforms

Some posts may promote fraudulent schemes or unauthorised investment platforms, typically offering high, guaranteed returns. Before signing up to any platform, make sure that it is registered with either the CMVM or the Banco de Portugal, and check the lists of warnings about unauthorised entities. There are no guaranteed returns, so any promise of them should be treated as a red flag.

Recommendations that do not take your investor profile into account

Just because a recommendation is technically correct does not mean it is suitable for you. While an investment may be suitable for someone with a 20-year time horizon and a high tolerance for volatility, it could be completely unsuitable for someone who needs access to their money within a few months.

What does the law say about finfluencers?

The purpose of regulation is to establish rules governing operations, transparency, and investor protection. Therefore, when considering an investment recommendation, it is important to verify that the information originates from a regulated source and that the promoted product or service is properly regulated.

In the European Union, the public disclosure of investment recommendations is subject to specific rules set out in the Market Abuse Regulation (Regulation (EU) No 596/2014) and its associated delegated regulations. These rules stipulate that the recommendation must clearly state who produced it and their role. They also require that recommendations distinguish between facts, interpretations, estimates and opinions, and disclose any potential conflicts of interest through every channel through which they are disseminated. At a European level, ESMA monitors the application of these rules and has issued warnings about the risks of market manipulation associated with this type of publication. Depending on the case and jurisdiction, failure to comply may result in administrative or criminal sanctions.

In practice, this means that you should not mistake popularity for credibility. Before investing, verify the information through official sources and make sure that the financial intermediary, platform or entity offering the product is authorised. Although regulation does not eliminate market risk, it establishes important oversight and protection mechanisms.

In Portugal, the competent regulator is the CMVM (Securities Market Commission), which set up a dedicated section on finfluencers in March 2025 and clarified the applicable rules. Two points are particularly important: a disclaimer such as "This is not financial advice” does not exempt the content from supervision; financial intermediaries who use influencers are responsible for the advertising messages disseminated by those influencers.

The scale of the phenomenon has also been quantified. In its annual report for 2024, the CMVM identified 33 finfluencers providing information on financial instruments on social media in Portugal. After analysing over 150 pieces of content and approximately 20 hours of video, the CMVM detected 32 instances of non-compliance with advertising rules and 28 instances of customer prospecting activity. In other words, financial intermediaries were soliciting clients without authorisation. In the same year, the CMVM initiated administrative offence proceedings for unauthorised financial intermediation activities. For the first time, they also imposed precautionary measures to seize and freeze the associated funds. More recently, the CMVM collaborated with ESMA and the other European supervisory authorities on a campaign targeting financial influencers. This campaign provided guidance on the responsible promotion of financial products and services.

Finfluencers vs. Financial Advisors

To understand the difference, consider what distinguishes a finfluencer from a financial advisor:

The key difference lies in suitability: social media content is intended for a general audience, whereas professional recommendations are based on your individual circumstances. If you’d like to find out more, take a look at what financial advisors do and when to consult one.

Finfluencers: what precautions should you take?

Follow these practical tips to help you distinguish between useful information and recommendations that might encourage you to take unnecessary risks.

1. Check who made the recommendation

Start by finding out who is "speaking”: look for information about the content creator’s qualifications, professional experience, and activities. However, don’t rely on these factors alone as proof of credibility.

A successful career, a large social media following or a notable investment portfolio does not guarantee appropriate or accurate recommendations.

If you receive a specific investment recommendation, try to verify the details using official sources of information. These could include information provided by the issuer, contained in the product documentation or issued by regulatory bodies.

2. Check the source and quality of the information

Don’t make investment decisions based solely on information that keeps appearing in your feed. Ask yourself where the data comes from, whether it is up to date, and how it can be verified. A good analysis should clearly distinguish between facts, interpretations, and opinions. This distinction is particularly important because opinions presented with a high degree of confidence can easily be mistaken for objective facts.

You should also consider the time horizon. For example, an analysis based on price movements over a single week could be entirely irrelevant to a long-term investment strategy.

3. Identify potential conflicts of interest

Before acting on a recommendation, try to establish whether it is motivated by financial incentives. Check if the content is sponsored, if there is a commercial partnership in place or if affiliate links are being used, or if the creator declares ownership of the asset they are promoting.

This approach is especially important when the recommendation concerns a specific platform, product or asset. When assessing the independence of a recommendation, information about whether an individual earns money when someone signs up, makes a purchase or invests may be relevant.

4. Compare the recommendation with official sources

Use finfluencers’ content as a starting point for your research, rather than basing your final decision on it. For example, if someone recommends a specific ETF, refer to the product’s official documentation to learn about the index it tracks, its costs, its distribution policy, its composition, and its key risks. If the recommendation relates to a financial platform, check that it is authorised and supervised by the appropriate regulatory body.

Although this check may seem more time-consuming than simply following a link, it enables you to decide based on information rather than influence.

5. Assess the risk

One of the most common ways of advertising investments on social media is to emphasise the potential gains. However, it is better to start by understanding what you could lose. Before investing, analyse the volatility of the asset, its risk of capital loss, its liquidity, and its costs. Where applicable, also consider the use of leverage. With more complex products, such as CFDs or certain derivatives, it is particularly important to understand how they work before taking a position.

6. Don’t let a sense of urgency influence your decision-making

If a post gives you the impression that you have to invest immediately, take a step back. Although the financial markets offer opportunities all the time, investment decisions should not be driven by pressure created through videos, viral posts or countdowns. Having a sense of urgency can stop you from comparing alternatives, analysing risks, and verifying information.

When it comes to investing, your strategy should be based on your objectives.

7. Consider any recommendations in the context of your portfolio

Before acting on a recommendation, consider what proportion of your total assets the investment would represent, and how this would affect the balance of your portfolio. For instance, if you already have a significant amount of your assets invested in technology, buying a new tech share simply because it’s being promoted on social media could increase your exposure to technology even further.

Diversification does not mean buying everything that comes along. Rather, it means building a portfolio of different assets, sectors and geographies to help balance overall risk.

8. Stay focused on your objectives

Finally, remember that investing isn’t a race to be the first to spot the next winning share. First, define your goals, time horizon and level of risk. Then, assess each new opportunity against this strategy.

Finfluencers can help you discover new concepts, keep up with the latest trends, and identify topics that you would like to study. However, the final decision must be based on your own analysis of information that you understand well enough to grasp the investment you’re making.

Where can you learn safely?

If you want to continue engaging with financial content on social media, make sure you have the tools at your fingertips to verify what you see:

  •  CMVM: there is a section dedicated to finfluencers which sets out the applicable rules and provides lists of authorised and unauthorised entities.

  •  Banco de Portugal: it allows you to check whether an institution is authorised to operate in Portugal.

  •  ESMA: it publishes guidance and warnings aimed at finfluencers and investors across Europe.

  •  Todos Contam: the National Financial Education Plan portal features independent financial literacy content.

Signs of credibility

These are some of the European rules that already apply to those who disseminate investment recommendations.

  •  They identify themselves and explain their qualifications and experience;

  •  They disclose their sponsorships, partnerships and affiliate links, as well as the positions they hold;

  •  They clearly distinguish between facts and opinions and cite sources;

  •  They discuss not just gains, but also risks and losses;

  •  They do not create a sense of urgency with phrases such as "last chance” or "buy before it’s too late”;

  •  They do not promise guaranteed returns because such a thing does not exist.

Remember that none of these indicators replaces your own analysis. Even if the content is accurate, it may not be suitable for your profile, objectives or time horizon.

Carregosa NextGen: supporting you to make more informed investment decisions

While following a trend or recommendation can be a good starting point for researching an investment, it should never replace a thorough analysis of the risks, costs, and suitability for your strategy.

With Carregosa NextGen, you can access the major markets and financial instruments via the GoBulling platform. The platform provides you with the information and tools needed to analyse investment opportunities more effectively.

With a history spanning over 190 years, Banco Carregosa is a well-established institution regulated by Banco de Portugal (under no. 0235) and the CMVM (under no. 0169). It is also Saxo Bank’s longest-standing international partner and has over 20 years’ experience in international electronic trading.

Contact us to find out how you can invest in a way that is both informed and conscious, and that aligns with your objectives and risk profile.

Finfluencers: FAQs

In the following section, we address the most frequently asked questions regarding finfluencers.

1. Is it safe to follow finfluencers?

Following finfluencers can be a useful way of learning about financial concepts and discovering topics you might want to research further. However, this information should be analysed critically, since not all content creators have a financial background or are subject to the same level of supervision as authorised professionals and institutions.

2. Are finfluencers regulated?

There is no general rule that all finfluencers must be subject to financial supervision. However, certain social media posts may constitute investment recommendations and are therefore subject to applicable European rules, particularly the Market Abuse Regulation. In such cases, requirements exist regarding the identification of the author, the objectivity of the information, and the disclosure of any conflicts of interest.

3. What should I do before acting on an investment recommendation?

Start by finding out who made the recommendation, what sources were used, and whether there are any potential conflicts of interest. Then, verify the information using official sources. Next, analyse the risks and costs of the investment and assess whether it fits within your portfolio and investment objectives.

4. Can finfluencers be held liable for what they publish?

Yes, they can. Certain posts constitute investment recommendations and are therefore subject to European regulations. These regulations include requirements regarding author identification, objectivity, and the disclosure of conflicts of interest. According to the CMVM, stating in a disclaimer that "this is not financial advice” does not exempt the post from these rules in itself, and failure to comply may result in sanctions.

5. How can I verify whether a given investment platform is authorised?

Check the lists of authorised entities published by both the CMVM and the Banco de Portugal, as well as any warnings about unauthorised entities. If the platform is not on these lists or promises high, guaranteed returns, be wary and do not invest.

Legal disclaimer: This article has been prepared by Banco Carregosa for information and educational purposes only. Under no circumstances does it constitute an investment proposal, recommendation to purchase, or personalised financial advice. Investing in financial instruments carries risks, as well as the possibility of losing the invested capital. Past performance is no guarantee of future returns. You should consult your account manager or financial advisor before making any financial decisions to assess whether they are suitable for your risk profile and financial objectives.