Finfluencers - BOD028

0:00You post when you're having a wonderful time, when you're with your friend. You don't post the cry you had on Tuesday.

0:05Pete:Or you're constipated and straining on the low. You don't post that, do you? You don't need to talk about it on a podcast either. But yes, I had a scam email, a scam text from Ringo, you know, one of the car parking apps. But it was sent from santeria1984 at gmail.com. Seems legit. Hi and welcome to the Bank of Dad podcast. I'm Kate and this is my dad Pete. Hello. And we're here to teach you the money lessons we were never taught at school. There's no judgment, no jargon, just real talk about how to handle your money. Here we are again, five minutes after ending the last episode. Yeah. We're batching.

0:41What's happened in your life since?

0:45Pete:Not a great deal since the last episode. I changed my teacher. How's the house purchase going, dare I ask? Nafal's happening. I should ask myself that, because I'm the holdup. You are not the holdup at all. yeah I think we mentioned this before because of the joint borrower sole proprietor scheme it means that mum and dad are essentially guarantors on the mortgage if I can't pay they pay obviously they won't they'll just sell the house but the point is that is kind of their role so therefore mortgage lenders have to prove that you've got that affordability that's fine that makes sense however dad doesn't earn money in a normal way well it's just because they own companies exactly so you get to do that dividends and yeah it's not like a P60 salary at the end of the year where it's dead easy you provide one document and that's proof so yeah and that's even though the lender has had my tax returns and they've had proof of dividends and all that sort of stuff they keep asking for more stuff it's very annoying but it is it is annoying but it's the way it goes it's just frustrating because people keep saying like oh when are you expecting to move in I'm like not a clue no idea but the offer was accepted 20th of May we're filming this on the 27th of July and we're no we're barely any further forward I haven't got a mortgage offer yet, but hopefully it's imminent.

2:00Pete:Fingers crossed, touch wood and all that. Yeah, fingers crossed for me, everybody. What are we talking about this week? This week is one that I'm going to have to really keep my emotions in check for. Why, because it's such a horrible word? No, because I get enraged by it. Do you? Okay, what are we talking about this week? Finfluences. Finfluences. Okay, I've been looking forward to this one, actually. Yeah, it's good. I think it's important because our audience or, you know, the age range we're specifically directing this to all are welcome I think are very easily or can be easily susceptible to the rubbish that people are putting out there through lack of education themselves not through stupidity oh yeah no no definitely not so yeah that's what we're talking about we're talking about influencers and why they sucked yeah like it or not you are one now I know that realisation came to me in the last video and I hate that yeah we just have to be a good one yeah before any of that though it is time for wanky word of the week it's time for wanky word of the week that is a banger it is what is this week's wanky word of the week Kate affiliate marketing affiliate marketing now we do this we do yeah yeah there's nothing wrong with it but you'll hear it a lot yes or you should hear it um from any financial influencer this is a way that financial or any influencer yeah can earn money yeah by recommending products of any kind should you say from makeup to isis right and in the process essentially whatever company they've got an affiliate deal with every client that goes there or anybody that buys something, the influencer gets a cut.

3:52Which is why they often have like a code. So you put that code in and that tells the company that they have come from that influencer.

3:59Pete:Yeah, use the coupon code bankofdow at checkout and you'll get 10 % off and the influencer gets a cut. We'll get a three pound or whatever. Yeah, exactly. It's interesting because I remember a few, well, a good few years ago when Zoella, Zoe Sugg, was at her height. Mass, like the original YouTube fashion blogger really and I was obsessed. You were. First of all, she was fantastic at getting me to buy stuff. Yeah, right. I bought so much stuff from her. But, you know, I really loved her. Anyway, regardless. Trusted voice. Trusted voice. And I worshipped the ground she walked on. But I remember vividly she posted on her stories once and didn't make it clear enough that it was an advert.

4:38Pete:Uh-huh. And people kicked off. Yeah, it was illegal and bad form. I think she'd put it somewhere, if memory serves. Yeah, probably not. But like really little in the corner of the picture or something. Anyway, and I remember her apologizing for it and being super prominent with it after. Yeah, it's good form. I mean, obviously, since those early days, the rules around affiliate marketing and stuff and advertising are much clearer. Oh, exactly. This would have been 2011, 2012. Yeah, right. It's a very different world now. It was the Wild West then, really. Yeah. So there's a lot more. You know, people don't like being either misled or kind of, you know, people being economical with the truth.

5:20Yeah, because this is my favorite. People don't mind being sold to as long as they know. Yeah, this is my favorite product ever. I use it every day. Ad in the corner. All right. Maybe she likes it. Maybe she doesn't. This is my favorite product ever. And Ad is tiny weenie.

5:33Pete:Yeah, yeah. And oh my gosh, she really believes in it. I will get it. And then actually you find out it was an advert. Yeah, it's like, oh, I use this. I really like it. and that's why I've partnered with such and such a firm. You get a discount, I get a cut. It makes the world go around, keeps the lights on. Thanks so much. Cool. You've made it really obvious. People know. Fair enough. Yeah, so affiliate marketing, I mean, it's huge. We do it ourselves. So we've talked about LifeSearch. They are the UK's sort of biggest life insurance advice firm. And even though we, being Jacksons, we can do protection, we do life insurance for people, it's not a specialism.

6:10Pete:so meaningful money and we certainly couldn't cope with the numbers that would come from meaningful money so we just send them to a live search they do a brilliant job and i'm essentially marketing for life search but i do believe in what they do i've done my own life insurance through them that's a bit of a rule for me by the way i have to have used the product if i'm going to recommend it i can't just sort of be paid this product yeah no no you never used it no i have to have used it and like it myself so which ought to be the rule i think but yeah but when you're an uber millionaire Yeah, well.

6:40You don't have to. Anyway. I'm not yet. No, you're not. Right, wanky word of the week completo. So, the first... I've been really... Have you been noticing that my structure's been really nice and clear into subsections the last, like, half dozen episodes? I have been noticing that, Kate.

6:52Pete:Well done, you. You haven't noticed that once. I have.

6:58All right. So, the first subsection of this video is just the general. So, i.e., the most general question of the more. What is a finfluencer, Dad?

7:07Pete:It's a hideous word is what it is. Yeah, it's vile. A financial influencer. There you go. Cool. Done. How do I know if someone actually knows what they're talking about? So, you know, Zoella's thing, to use her as an example, was that she was like, I'm not a makeup artist, but this is what I love to do at home. And I was like, I'm not a makeup artist either. Well, if she can do it, maybe I can. But she would demo it and look fantastic. Yeah, she would. So clearly she did know what she was doing. Yeah, she was brilliant. She wasn't necessarily qualified. No. And when it comes to finance, I think the same applies.

7:39Pete:People can know what they're talking about and give very good information, but they may not be qualified. Who is it that Rog said is like, is it Martin Lewis who's not qualified? Yes, so Martin Lewis is the OG for influencer. Yeah. Right, so he created, he's way ahead of me, he created money-saving expert. Yeah, which we've used how many times on this channel? Well, it's just a brilliant resource. There was a time, I'm not sure if it still is, where the forums, so this is how old that site is, right? It's a forum. That was the biggest single database of names in the UK. Bigger even than Nectar, Tesco Clubcard, that the MSC forum, Money Saving Expert, was the biggest database of individual names and email addresses in the UK.

8:26Pete:Flip me, that's insane. Massive, right? He sold Money Saving Expert for 50 million quid and he still fronts it. Right? the man is a legend there's no doubt about that but he doesn't have a financial qualification to his name he really knows his stuff but he can't say I'm a trusted financial advisor no no so it's hard to know whether somebody knows their stuff or not a lot because it's also quite easy to lie about the outcome isn't it it's like I'm 24 and I'm a multi-millionaire are you? you know have you rented the Lamborghini you're sat next to or do you just have to walk around Mayfair and just take a picture of it, put a suit on, and stand next to a random Lambo in May.

9:08My favourite are people who do that and don't realise the driver's in the back. Yeah, genius. And they're like, hop the horn and they jump miles.

9:14Pete:Yeah, draping themselves across the bonnet. Yeah. You know, it is hard to know if somebody actually knows what they're talking about.

9:24Pete:There's a sort of golden rule that if something sounds too good to be true, it is. You know, it probably is. So any, you know, sort of high claims or claims of getting rich quick. You could be an overnight millionaire. Yeah, no, you can't. It doesn't work like that unless you win the lottery. So, and you're not going to. No. So, you know, you can find a financial influencer. I think longevity helps. Yeah. So, I mean, I've been doing this 16 years, and I'm a qualified advisor, and you can look me up on the Financial Conduct Authority register because I'm a regulated individual. I was going to say, what is that?

9:58Pete:The Financial Conduct Authority is the UK's finance regulator, so it's the government body that regulates finance in the UK. That stops you going willy-nilly, invest in MeaningfulMoney.tv. We're great. Yeah, yeah, right? Yeah. It stops you doing self-serving things. It gives you strict rules. It protects consumers. That's its job. So they have a register of qualified and authorised financial advisors and I'm on that list and I've been for nearly 30 years. That's a list you do want to be on. Yeah, it is really. so one could argue that I should know what I'm talking about given that I've been doing my job nearly 30 years yeah right whereas but the same another person who doesn't have a single financial qualification never advised a client could say the same stuff and he'd be just as right as I am yeah but it's quite nice knowing you've got the qualifications yeah I well I think so and interestingly I see a real trend in finfluencers getting their financial advice exams which I think is a very good trend what winds me up slightly is when they put uh advisor qualified financial advisor in their bio qualified yes financial advisor are you advising anyone if you've never advised a client you shouldn't be allowed to say that oh you're not allowed to or you just think you shouldn't you shouldn't you are there's nothing stopping you that's which i think is a problem yeah i agree so on that same thread are all influencers regulated like you are No, definitely not.

11:19Pete:But you can't say whatever you want online without implications. So there have been plenty of examples of finfluencers or even non-finfluencers, like people who are just influencers in any kind of field, but who get recruited to sell like a trading platform. and then don't put the proper disclaimers in place because it's the same thing in investment there's certain things you have to say and have got in trouble for it and have been censured by the conduct authority our videos have a disclaimer on the end that this is not regulated advice it's not financial advice past performance, no guide to future performance capital at risk capital at risk they're there for a reason if you neglect to put those then you are breaking the law so there are laws about what you can say publicly.

12:12Pete:I am even more constrained because I'm a regulated individual which winds me up a little bit but hey. Yeah, they can say whatever they want and you can't. Yeah, I mean you can say what you want in the name of journalism, for instance so there's nothing wrong with say putting up an article that says here are the five best platforms for your ISA this year if I did that I'd get in huge trouble but if I'm a journalist I wouldn't as long as you put disclaimers there so I can't as a regulated individual talk about specific providers I can't say I can say it's a brilliant idea to do an ISA users talk to chairs that could mean anyone could you're not saying open this one with this or there's a load of great funds but actually Vanguard have got a really good one because that could be construed to be advice because I am regulated so it's a bit of a rise you could get sued basically Pete's advised me to go on Vanguard look here he said it yeah it is proof yeah exactly so i have to be careful that's why quite often with meaningful money i'm like you accidentally said the word advice can you say that sentence again without the word advice in him please so even though everybody knows especially meaningful money yeah but one person yeah exactly to take it and it not be the right thing if you don't have to be regulated can anyone just call themselves a financial expert who's read a few books you didn't call themselves what they want yeah people will believe them i guess yes what they say that matters so you can be a financial expert i mean great example for example uh nick mitchell who works yeah with us at meaningful money and bank of that you know he's so in the whole meaningful money thing right so he's media team yeah so he does a load of work behind the scenes particularly meaningful academy my courses um site meaningful money inbox oh my god i'd say if he ever leaves me i'm packing the whole thing up um but nick is really knows his stuff.

14:05Pete:Yeah, he knows Voyant better than you do. Nearly, as well as I do. But yes, I mean, there's not a lot he doesn't know when it comes to the financial services system and financial planning and how to use the software and all that. But he doesn't have any qualifications. Does it matter? Nope. Because he's proven himself many, many times over. The community love him because he's just brilliant at answering questions, you know, and does so succinctly and clearly with screenshots. So anybody can call themselves a financial expert and they It may be. But it's what they're saying. But it's what they're saying.

14:37Pete:But it's hard to know if what they're saying is true or not. That's the problem. Okay. Section two is all about spotting good or bad advice. Information. Let's call it information if we can. Okay. Because it's not advice. But that might be your question. No. All right. So how can we tell... Well, this kind of does need to be the word advice. How can we tell if financial advice or information or whatever people put out there is genuine? in well let's kind of define advice then given it comes up really advice by definition needs to be specific to your situation by which a video is not no by definition if it's put out there for the entire internet to consume then it can't be specific to your situation so if advice is individual then yes by definition anything that goes up on the internet as sort of broadcast can't be specific enough to your circumstances therefore you must take it with a pinch of salt yeah don't accept anything you read first or watch first on the internet as advice specific to you it just isn't the only way to do that is unfortunately to pay for advice yeah they don't know your hopes your dreams your fears your aspirations what matters most what risks you're concerned about all that sort of stuff yeah all right well that that does kind of make sense so what are there some really big red flags to look for yeah we mentioned if it's too good to be true it probably is so if something says man alive really what i could there's a risk-free way of making 10 000 in a week.

15:59Pete:We'll go out tomorrow. Yeah, exactly, right? No. If it sounds too good to be true, it definitely is. It'll be, at best, bad information, and at worst, it'll be a scam. Yeah. And fraud. So, hypey promises, without any discussion of risk. Yeah. You can't make money without risk. It just doesn't work. That's the way the universe works, unfortunately. Well, it would be great, but then everybody would be billionaires and money would have no meaning. Yeah. so hyped overhyped promises without any discussion of risk that's that's the biggest one I think really anything anything where you have to part with money to get information ooh like insider information yeah so for instance I have meaningful academy so I have two courses that people buy and pay for but I'm very open all that information is available for free what the academy does is curate it and bring it very clearly into steps to take this video first then the next one 700 podcasts but people occasionally email me will I get anything from the academy that I can't get from the YouTube channel the answer is no because it's all there except for I suppose you do get some sort of like calculators and worksheets you get the community and stuff but the information isn't you know so if you have to pay for insider information it's a scam yeah that's the secrets of the market well yeah secrets of the market my proprietary trading system piece of software that I've vibe coded in Claude in 20 minutes that will tell you what stocks to buy yourself every sentence you say vibe coded in Claude more people will know what that means than you maybe I know what Claude is no vibe coding is coding by no coding by prompting an AI rather than actually come.

17:54Pete:Ah, okay. That makes sense. Either way. But, I mean, if you have to pay somebody for insider information, it's 100 % a scam. I mean, insider information sounds as sketch as it is. It is absolutely right. Just stick with that concept. So, I mean, this is a funny question because it's like, it might seem obvious, but why do you think they always promise these get rich quickly schemes? Because it's attractive, isn't it? Yeah. Look, if people are desperate, if people are in financial difficulty, it's quite a carrot to dangle in front of them to say, actually, you can fix your financial problems with not a lot of outlay.

18:31In 10 days.

18:31Pete:In 10 days or in six months even. Like, oh my gosh, I'll do that. It's like, you know, if you said to me, pay me a thousand quid and I'll guarantee you'll lose four stone in six months. I'd be like, oh, okay. but of course the problem is I have to do stuff yeah like not eat Haribo they've been really good though actually I really want to go to the gym more than I do or whatever and so you know any kind of promise of get rich quick is deeply alluring yeah and they they make it seem like you don't need to do anything they make it seem lazy it's like oh perfect I don't have to do anything and magically I get 10 grand in my pocket it's kind of a rule of life nothing good happens without effort yeah I always use the example no Olympian ever fell out of bed and onto the podium.

19:17Pete:There is countless hours of blood, sweat, tears. Yeah, there's a reason we're not Olympians. Olympians eat too much Haribo. Oh, that's good though. Yeah. So it's lowering. You're going to part with money if you've got a brilliant promise. Yeah, you are. Okay. Investing content specifically is the next kind of subsection. So you're going to love this question. should I buy stock because an influencer says it's going to explode? How does the influencer know it's going to explode? They don't. They don't. So the answer is no, you shouldn't do anything. You shouldn't buy a single stock anyway. I think it's a terrible idea.

20:00Pete:A single stock is a punt. It's a bet. Might as well bet on a horse. As opposed to buying a fund, you mean? Yeah, a fund with 10 ,000 stocks in it. Gotcha. Because, you know, you're spreading your risk that way. the fact is buying shares in a single company is a bet and so the influencer has no idea which way it'll go they have an opinion they'll quite likely be wrong put it this way, they've got a 50 % chance of being wrong those are quite crap odds if you're going to put your money on the line I want better odds than that and he will probably take a cut off well particularly if it's like hey buy this stock and buy it on XYZ platform because I'll get 25 quid when you open an account It's easy then, isn't it?

20:42Pete:Yeah. They've got nothing to lose. Exactly. This next one, I don't want to say. Yeah, I can imagine this would make you clench. Partly because there's some meanings. It's linked to your previous question, though. Carry on. Yeah, but there's also some urban dictionary meanings, shall we say. Okay. What is a pump and dump? So if I'm an influencer and I want to make a load of money, right, I can choose a company like a stock. Very famous example of this was basically a failing games company in the US called GameStop. And some guy, I can't remember who it was, kind of started bigging it up. And it got picked up by the internet.

21:27Pete:Basically, it kind of went viral. And people started investing in the stock and the shares of GameStop. and the price just skyrocketed. So that's pumping, right? Hyping it up to get more people to buy it. Stocks like properties go up in value if there are more buyers and sellers. So if people are buying, the price goes up and up and up and up. Now, if I bought that stock right here at the start and I'm the one doing the pumping, psyching it, you know, raving about this stock. You know, let's say I put a thousand quid in here and I'd like my thousand quid to go up. If I can persuade a load of people to buy it, my thousand quid suddenly becomes ten thousand quid.

22:09Pete:And then I'm going to sell up. Then I dump the stock. So I pump it up and I dump it out at the top. So you've just earned. Pump and dump. It's a joyous expression. But, you know, that's what it is. So I'm pretty sure that's illegal. Yeah, I thought so. But it happens too much. So why do influencers always say this isn't financial advice? Because it's not, we mentioned this earlier on, advice by definition is specific to an individual. So it's a cover your ass kind of thing, which is good. Well, that's my next question. Does that mean that they're still responsible if they say it or not? It's not a sort of get out of jail free card for them.

22:48Pete:It's not, well, I said it's not advice, right? You still have to, you can't say that and then not put all the proper reg warnings, regulatory warnings on your video or whatever. This is not advice, but. But it is really. It is not advice. But you should do it anyway. You know, it's like, come on. but any sort of reputable influencer would understand that words have impact. Yeah. You know, I'm acutely aware that tens of thousands of people listen to me every week, and us now, and that, you know, with great power comes great responsibility. With great power comes great responsibility. I couldn't sleep at night if somebody made a decision based on something we'd said in a throwaway comment.

23:29Pete:And so as always, we're always saying, look, you must get specific advice. you must do your own research we'll help as much as we can but it's only information we can't know the individual circumstances of 10 ,000 people because we don't know your situation no advice is always specific so it's a bit of a sort of catch-all disclaimer but at least it's better at least it's making you aware so should I just copy someone else's investment portfolio if an influencer's gone this is what I invest in well you can great friend of mine Damien Fay moneytothemasses.com he has for years I think he still does it has a like a portfolio that he shares.

24:04Fair enough.

24:05Pete:And people can copy it if they want. But he's not going to say this is perfect. He said this is the way I invest. Copy it if you want. And it's quite nice. Some people will probably be like, okay, someone else is doing that. So it can't be wrong in inverted commas. There is no wrong investment. This is what I mean. But they feel like... I don't have to think of it then. Yeah. I can just do this. It'll probably be okay. And he will. Oh, he seems to know what he's doing. I'll put my trust in what he's done. Yeah, exactly. Yeah. Another friend of mine, Roman Akisa, brilliant YouTube channel called Pension Craft.

24:33I mean, he's an investing superstar.

24:36Pete:He explains it better than anybody that I've ever come across. And he has, he's very open about what he invests in. But he'll always say, you know, you do your own research and, you know, I can't tell you whether this is right for you, this is right for me, but I'm happy to share it. As a regulated individual, I would stop short of that. Yeah. Because it could be deemed to be advice. Advice. I'm regulated and I'm doing this. Yeah, okay, that must be good. That must be good. That must add extra weight to it. Yeah, yeah. That said, when I'm dealing with clients, so it is advice, I'm always very happy to say that my own pension is invested in the same way that I'm recommending clients invest.