15-second videos that promise easy enrichment. Real estate, crypto, stock market: everything is there. “I am 22 years old and I am a millionaire. Aren’t you rich yet? Stop fooling around! Follow me on TikTok! »
While the over-40s are busy clicking shady links that promise a free iPad in exchange for banking info (I’m expecting mine any day), Gen Zers are being bombarded by these videos that whip the fear of missing an opportunity to make a quick buck.
“My 16-year-old sons can’t listen to me for 15 minutes or put a plate in the dishwasher, but they can spend two hours on TikTok listening to influencers,” quipped Antoine Bédard, senior director of the assistance to clients of the Autorité des marchés financiers (AMF), recently, within the framework of the 10e Financial education day organized by the AMF at McGill University.
Trained by viral videos, more and more young people are convinced, for example, that it is impossible to lose money with cryptocurrencies.
“Among influencers, we have very good, average and very ordinary,” summarized Mr. Bédard, who presented the group of experts on the issue of financial influencers, or “finfluencers” in English.
The goal of financial influencers is to create familiarity with their audience, noted Sandrine Prom Tep, professor in the marketing department at ESG UQAM.
“The financial influencer presents himself as someone who wants to help us. He plays on it. The message is: “I am like you, you are like me. I can make a million, and so can you,’” she said, adding that it’s hard for a young person not to be seduced by such a message.
Given his position, the financial adviser imposes a “distance”, which makes the message much less catchy. “Especially if the young person is a little rebellious, he will be more sensitive to the message of the influencer than to that of the financial adviser. »
Julien Brault, president of the company HardBacon, explained that with TikTok, any 17-year-old can become a mass media. “There is still a danger. People promote different investment products, perhaps without realizing that you need a license from the AMF to do that in Quebec,” he said.
The fact that money is “the last taboo subject” allows influencers to occupy this space often left vacant in people’s lives, said Chantal Lamoureux, president and CEO of the Institut québécois de planification financière (IQPF ).
Athletes, stars, everyone talks about their mental health. Between friends, at dinner, we can confide in very intimate things… But we won’t tell each other how much we have in our RRSP, or if we’ve lost money… If we stripped our relationship to money, we would already have part of the solution.
Chantal Lamoureux, President and CEO of the Quebec Institute of Financial Planning
Marianne Spear, finance student and host on the show Talking about money is not stressfuldoes not oppose financial influencers, but regrets that some put pressure on their audience.
“I feel a lot of guilt, shame and embarrassment in people in their 20s and 30s who follow these influencers [mais qui ne sont pas riches]. They want to make a money pass fast enough, they’re vulnerable. »
She said never to see a financial influencer’s follower count as a “gauge of trust” over their skills.
A good financial influencer, says Marianne Spear, is someone who manages to trigger thinking. “Personally, that’s how I see my role. I try to think further, but I don’t necessarily come up with an answer. »
Everest on roller skates
Last week I asked you if you were trying to beat stock market returns.
Dozens of readers have told me of their stock market misadventures.
“I started investing in the spring of 2020, writes Michel to me. Very good period. Very profitable and interesting the first year. Zoom, Lightspeed, Nuvei, Electric Lion… I really felt like I had climbed Everest on roller skates, all that money with so little effort… Three years later, I find myself with a negative stock market portfolio. »
A few readers have told me that they have beaten the market for a number of years, ranging from 3 years to 14 years.
More than 64,000 companies were listed on the stock exchange worldwide between 1990 and 2020. Of these, 2.39% were responsible for all of the market gains during this period, according to calculations by Hendrik Bessembinder, of the University of Arizona. This means that these readers have managed to select some of them.
I’m sure some will keep going. But let’s not forget: an investor’s life can stretch from the age of 18 to 98, a period of 80 years.
An investor who underperforms in just one of those eight decades could see his assets shrink by half or more than the person who just buys the market. It’s not for nothing that 95% of pros have underperformed over a 20-year period.
Do such risks scare you? Congratulations, you are investing with your visor up. I wish you good luck in the markets.
The question of the week
What do you think of financial influencers that cater to young people?