By coinnews 
00:00 Speaker A
Social media has no shortage of financial influencers, or finfluencers as they’re commonly known, promising their followers quick trades and insider tricks to triple their wealth. Sorting fact from fiction can be daunting at times, and here with some advice for how to navigate the flood of online financial advice, I’m joined by Richard Coffin, who is an investment analyst at WDS Investment Management. He’s also the host of the Plain Bagel YouTube channel with more than 1 million subscribers. Richard, good to have you here with us. So, what are some red flags that folks should look out for when watching finfluencer content?
00:51 Richard Coffin
Yeah, so even before getting into that, it’s worth highlighting there are a lot of great creators and great content in the space. Uh, but there are some red flags because there’s not much moderation that happens with type of content you come across. So, number one being if wealth is used as the primary qualification, you see people showing off their money or their fast cars and the like. It’s usually being used as a substitute for more solid qualifiers that you really should be looking for. The other thing is too good to be true promises, uh, when you have a person that’s promising an easy way to financial freedom, a course that shows a secret sauce that’s going to improve trading returns and beat the market. And really the last one is when you have material conflicts of interest. Uh, everyone has a conflict of interest of some sort, but uh, when you have people who are actively trying to sell something, there’s a motivation behind that’s going to skew the information they’re providing you on the topic. That’s really something you need to look out for.
02:13 Speaker A
Okay. So, what about the green flags on the other side that can really help validate a social media personality’s credibility, if you will?
02:26 Richard Coffin
Yeah, so transparency is one of the biggest ones. Uh, when you have someone who’s honest about their qualifications, about, uh, what their motivations are for posting content and why you should really, uh, they’re very open with their circumstance and the information you need to be aware of. Someone who’s going to focus on facts versus their opinions, they’re not making wild speculations, they’re sharing the sources of their information and why they’re making the claims they are, and it’s not, uh, wild guesses about a stock going massively higher. It’s, it’s more grounded in, in details. And then finally, when you have someone who’s more nuanced and balanced, uh, they aren’t, uh, focusing just on the positives of the stocks they like. There’s a lot of stock pick content you have of people trying to show you the next big stock that’s going to take off, but really the people who are more balanced and actively acknowledge not just the risks of investing, but more specifically the risks of what they’re talking about, uh, those are great things to look for in a, in a creator of who’s going to be more honest with you.
03:50 Speaker A
I mean, this is bound to pop up in anybody’s feed. I know it’s hit mine as well. What are claims, though, you’ve seen recently from online finfluencers that you think and have to label as misleading?
04:11 Richard Coffin
Well, tariffs and, and the current macroeconomic environment are really hot topics. Really anything that you see cycle in the news, you’re going to see a lot of influencer content on. And you see both sides of it. You see, uh, people who believe that’s the once in a lifetime opportunity to make, uh, tremendous amounts of wealth. We have others who highlight that we’re about to see a 60% crash, uh, that this is 2008 plus the.com crisis is one claim I’ve seen, uh, which really doesn’t represent the situation we’re in. Of course there’s risks with everything, but again, it’s that nuance that really matters in those discussions. Uh, but really the more harmful stuff is, uh, when it comes to stock picks, you have people who show very shallow analysis at times and really don’t give the full picture. They focus on incredible positives of a position without highlighting the severe risks that might exist, and you can even have things like potentially illegal tax tips that you come across when it comes to people believing you can avoid taxes if you follow certain corporate structures and the like. And certainly there are tax strategies, but it’s the simplification of what are inherently complex and detailed subjects.
05:54 Speaker A
What about when a finfluencer has a major corporate partnership or some type of collaboration that’s going on? What’s the way to kind of read through that and assess what’s relevant for you versus what’s perhaps necessary of doing a little bit more vetting?
06:17 Richard Coffin
Yes, so that’s actually a really interesting topic because there’s a good percentage, the vast majority of content that includes recommendations doesn’t actually include any disclosure about, uh, expertise, background, qualifications, or if there’s any sort of arrangement. You commonly see affiliate links and the like without any sort of disclosure around how those affiliate links are paying the creator. Uh, so looking out for any sort of signs of that sort, why, you have to ask yourself why is a creator highlighting a certain service or product, and really be cautious of that and, and look for that, uh, transparency. If you don’t see that, if you see someone trying to sell you something and they really aren’t qualifying it with the needed information, then really, again, you should be, uh, maybe looking elsewhere.