If your firm won’t advise them, who will?

James Langton reported last week that provincial securities regulators in Alberta, British Columbia, Ontario and Quebec have teamed up with a group of international regulators to crack down on so-called finfluencers. All in, the coordinated effort covers Canada, the U.K., Australia, Hong Kong, Italy and the United Arab Emirates.

“Our message to finfluencers is loud and clear,” said Steve Smart, joint executive director of enforcement and market oversight at the U.K.’s Financial Conduct Authority, in a release. “They must act responsibly and only promote financial products where they are authorized to do so — or face the consequences.”

Jonathan Got dug into this for us in the February print edition of Investment Executive. In a chart listing 10 of Canada’s most popular finfluencers, Got reported that just two had a certified financial planner designation. Both of those — Richard Coffin and Ben Felix — also hold the chartered financial analyst title. Seven of the 10 hold no current professional financial services designation.

It’s easy to poke fun at influencer culture, but there’s real harm being done by some of these people. They’re often ill-informed and many fail to disclose their associations with sponsors who put money in their pockets, out of either self-interest or ignorance. But they are clearly influential.

“More than half (56%) of Canadian investors rate advice from social media or finfluencers as valuable or more valuable than advice from traditional financial advisors, according to a 2024 survey from the Canadian Investment Regulatory Organization. Respondents who had the least financial literacy and lowest amount of investible assets were the most likely to value a finfluencer’s advice over a traditional advisor,” wrote Got.

I take no issue with financial professionals leveraging digital channels like YouTube and LinkedIn to educate Canadians on household finances. Financial advisors are uniquely positioned to add value in this space, which is why we promote content marketing best practices on Advisor.ca. The medium is problematic, but it’s still a viable way to share quality information and build your practice in the process.

Adam Elliott, president and chief executive officer at iA Private Wealth shared an interesting take on all of this via LinkedIn this week.

“In my view, several firms using the full-service brokerage model are partly to blame for this, as many have driven younger clients away,” Elliott wrote. “Many firms essentially prevent their advisors from working with potential clients in their 20s and 30s by setting minimum account revenue levels that can’t be met early in one’s career. In other cases, closed product shelves focused on proprietary products are of little appeal to a generation that wants to trade how they want, when they want and the products they want.”

He’s right. There is a pervasive view among too many firms about the importance of attracting clients with a certain threshold of investable assets. Notwithstanding the economies of scale in wealth management, firms that penalize advisors for serving clients that don’t meet those thresholds have clearly lost sight of the industry’s purpose — not to mention the long-term benefits of lifetime client relationships.

Elliott and I spoke on Friday. “If the first time you take an interest in them is when they’ve inherited their parent’s money, don’t be surprised if they say no, thanks,” he said.

IA Wealth doesn’t set account or revenue minimums, Elliott said. “We strongly encourage our advisors to make sure they are working with the younger generation and multiple generations of the same families.”

Kevin Press

Industry

Kevin Press is editorial director of Advisor.ca. Reach him at kevin@newcom.ca.