NEW DELHI
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In China, some social media influencers are being taken by the police for questioning for spreading misinformation online. An Economist article recently cited how China’s police are taking online fibbing seriously. Globally, misinformation causes a lot of stress, but the biggest source of evil is from finance influencers who spread misinformation.
It is one thing to buy the wrong bottle of moisturiser, but it is a totally different game to gamble away your life savings based on the advice of a finance influencer who may not have your best interest at heart. Many financial influencers are not qualified to give financial advice. Many don’t reveal their brand collaborations completely. Many give financial advice that is downright wrong and dangerous.
The core question is, why do finance influencers have so much sway over the masses, especially Gen Z? The biggest reason is that they are excellent storytellers. As someone who makes a living teaching and practising storytelling, let us look at some principles of storytelling finance influencers deploy that help them get away with their questionable choices.
Tap into the emotional subconscious brain
Our emotional brain drives the majority of our daily decisions. Almost every catchy reel on Instagram is built on the emotion of fear, anguish or FOMO (fear of missing out). Headlines like, ‘This is how I made ₹5 crore in one year’, tap into the insecurities of the younger generation. As a result, there are many Gen Zs delving into the dangerous world of futures and options (F&O). A Securities and Exchange Board of India (Sebi) study recently found that 9 out of 10 individual traders lost money in the F&O market in 2024. As a principle, Gen Zs should stay out of the F&O market.
The other emotion they tap into is ridicule. ‘Do you still invest in fixed deposits?’ In that case, ‘what a loser you are’, is often the hidden text of some messages. No financial asset is good or bad. It depends on your stage of life.
And no financial asset makes you a loser.
Leveraging the power of popular culture
Reels and shorts travel because they tap heavily into popular culture. Popular culture as a storytelling principle is immensely powerful as it immediately drives connection in everyone’s minds due to easy availability. Whether it is the latest meme, the latest soundtrack or the latest catchy line, finance influencers are experts at this. Some of these reels were why, in 2022, many Gen Z investors ended up in a soup after they invested in the crypto platform Vauld, and then Vauld ended up suspending transactions, creating all-around panic.
The rule of three
Communication always sticks in groups of three. In storytelling language, three is the smallest number at which the brain can form a pattern that helps it remember. Neither is it too little nor too much for the brain. Most communication messages by finance influencers stick to ‘three benefits of doing what I am saying’. Traditional financial literature or investments are plagued by brochures no one understands or are too complicated, and hence, this simplicity gets appreciated by millions of Gen Zs.
So, what should you do if you are a Gen Z and your subconscious brain is not able to resist the content finance influencers are preparing? One option is to stop following them, as a lot of them do more harm than good. Only follow the ones that are genuinely adding value without deceit.
When in doubt, always follow trustworthy sources. There are few sources more trustworthy than print media. Hence, read newspapers to get your daily dose of financial literacy and investment information. Newspapers will show you the right mirror.
Finally, should finance influencers who spread misinformation be arrested, like in China? That would probably be pushing it too far. Maybe strict regulation is the answer. Fortunately, Sebi is getting started on this journey.
The writer is the author of How Business Storytelling Works and The Practical MBA.
