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While the creator economy traditionally focuses on lifestyle, fashion, and entertainment, financial influencers are becoming increasingly popular on social media platforms. For better or worse, these creators affect how retail traders approach the markets. Platforms like TikTok, YouTube, and Instagram have become hotbeds for financial advice, with creators posting everything from stock tips to explanations of complex trading strategies.
The Role of Financial Influencers in Retail Investor Behavior
With just a few clicks, users can find opinions advice on daily trading strategies, long-term investment tips, or even speculative plays.
It’s well-documented that financial influencers with large followings can significantly impact retail investor behaviour. This phenomenon became particularly visible during events like the rise of meme stocks.
Meme stocks in 2021 and Reddit’s /r/WallStreetBets: The meme stock surge, most notably involving GameStop (GME), AMC, and others, was driven by discussions and coordinated efforts on forums like Reddit’s /r/WallStreetBets. These discussions emphasised collective action to counter institutional short-sellers, leveraging social media platforms to amplify the movement.
However, while financial influencers are a growing force, most retail investors still rely on multiple sources, including professional analysis, financial news outlets, and personal research. Financial influencers act as one piece of a broader information puzzle rather than the sole drivers of market behaviour.
How Social Media Algorithms Promote Financial Content
Social media algorithms are designed to amplify content that keeps users engaged. Platforms like TikTok and Instagram prioritise videos that generate high engagement, such as likes, shares, and comments. As a result, financial advice, whether from credentialed professionals or hobbyists, often reaches vast audiences.
They are not explicitly designed to determine whether content is accurate or reliable. This can sometimes mean flashy or overly optimistic advice gains prominence over measured, data-driven guidance. This dynamic underscores the need for caution when consuming financial opinionsadvice online.
The Risks of Unregulated Financial Advice
There’s another caveat: Many financial influencers lack formal financial qualifications or industry experience. This has been widely recognised as a risk, with unverified advice often being overly simplistic or unsuitable for a broad audience.
Regulatory bodies like The U.S. Securities and Exchange Commission (SEC) and the UK’s Financial Conduct Authority (FCA) have warned about unregulated financial advice, particularly from influencers. These warnings typically emphasise the risks of misinformation, market manipulation, and potential scams.
The assumption that follower count equates to credibility is a documented issue. Influencers often gain large followings for entertainment value or charisma, not financial expertise. While engaging, viral content can lead to impulsive and uninformed decisions, which could result in significant financial losses.
All traders and investors should conduct independent research and verify financial advice from online sources, especially when it involves their hard-earned money.
What’s Driving the Growth of the Creator Economy?
So why is this sector exploding?
For one, more than 5 billion people around the globe use social media, according to an article by Investopedia. (Source) That is a massive audience!
There are several factors contributing to the exponential growth of the creator economy,
- The Power of Social Media Platforms: Platforms like YouTube, TikTok, and Instagram have made it easier than ever for individuals to reach vast audiences. TikTok, in particular, has shown how quickly a person can go from an unknown user to a viral sensation with millions of followers. Financial influencers are capitalising on this, offering investment tips and advice that reach millions of eager eyes.
- Brand Investment in Influencers: Companies are increasingly shifting their advertising budgets toward influencer marketing. Many fintech and brokerage firms partner with influencers to target younger, tech-savvy demographics. Partnerships with investment apps like Robinhood, Acorns, and similar platforms are well-documented examples.
- The Changing Workforce: As younger generations continue to move away from traditional 9-to-5 jobs in favour of flexible, gig-based work, the creator economy has become an attractive option. Gen Z and Millennials are drawn to the idea of being their own bosses and setting their own schedules. While the creator economy is appealing, it is not without challenges, such as market saturation, income volatility, and reliance on platform algorithms.
Regulatory Risks: Platforms and firms linked to social media and digital advertising could face increased scrutiny over data privacy, copyright issues, and transparency.
Potential Opportunities for Traders in 2025?
In 2023, influencer marketing was worth approximately $21 billion globally. Its value increased dramatically in 2024 and shows no signs of slowing down.
“The creator economy could approach $480 billion by 2027, driven by advancements in monetisation tools and diversified revenue streams,” according to a Goldman Sachs report. (Source)
This growth may offer potential opportunities in several related sectors. If they align with your strategy, here are a few areas worth watching.
Social Media Platforms
The possible upside: Platforms like YouTube (Alphabet), TikTok (ByteDance), and Instagram (Meta) are likely to be key beneficiaries of the creator economy’s expansion. As more influencers join these platforms, advertising dollars will continue to flow, potentially making these companies attractive to investors.
The potential downside: The current global headlines featuring Bytedance have highlighted the ever-changing nature of financial markets. Investors should keep a close eye on the news to monitor potential regulatory challenges (e.g., data privacy or geopolitical issues with TikTok).
Digital Marketing and Analytics Firms
The digital marketing analytics sector is rapidly evolving, driven by technological advancements and shifting consumer behaviours. As of January 2025, several key players and emerging technologies are shaping the competitive landscape.
Established Firms: Companies like Sprout Social, HubSpot, and Salesforce continue to lead in providing comprehensive digital marketing analytics solutions. These will likely continue to benefit from growth in this market for some time.
Emerging Players: New entrants focusing on niche areas such as AI-driven analytics, real-time data processing, and enhanced user experience. These companies aim to address specific gaps in the market, offering tailored solutions that cater to the evolving needs of marketers.
The digital marketing analytics sector in 2025 will be intensely competitive and marked by rapid technological advancements. Technologies like AI and blockchain are expected to disrupt many traditional practices, offering opportunities for innovation and efficiency. However, stakeholders must navigate the accompanying challenges to fully realise these technologies’ benefits.
E-Commerce and Merchandising Platforms
Many creators, including financial influencers, diversify their income streams by selling merchandise or digital products. Platforms like Shopify, Etsy, and Patreon are integral to creators monetising their brands. Shopify and Etsy have proven track records of benefiting from e-commerce growth, while Patreon provides a direct way for creators to earn from their fanbases.
Growth or Uncertainty Ahead?
The creator economy and the rise of financial influencers are more than passing fads. Both seem positioned for continued expansion during 2025 and beyond. However, there’s inherent volatility in this space.
Social media platforms can gain popularity fast and become yesterday’s news almost as quickly, and new players may emerge, disrupting the existing landscape. You’d be forgiven if you don’t remember MySpace. It was once a dominant social media platform that allowed users to customise profiles and connect with friends. It lost popularity after Facebook emerged as a major competitor.
And then there was Vine, a short-form video platform that amassed a massive following for its 6-second looping videos. Despite its success, Vine shut down in 2017 due to competition from Instagram and Snapchat.
These examples remind us of the transient nature of social media platforms, apps, products and even entire companies. Just because they exist today doesn’t mean they will enjoy continued success in the future.
Emerging competitors, like decentralised social media platforms or innovative AI-driven tools, could disrupt the current landscape in ways we cannot even comprehend today.
Traders and investors searching for new opportunities in and around the influencer economy will undoubtedly find them, from investing in the social media giants that host content to exploring digital marketing firms and e-commerce platforms tied to the creator economy.
As always, investors should remain cautious, recognising the transient nature of trends and platforms. While opportunities exist, due diligence is crucial, especially in navigating the unregulated world of financial influencers.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organisation, employer, or company. The information provided is for general informational purposes only and should not be considered professional or expert advice.
Sources:
Goldman Sachs. “The Creator Economy Could Approach Half a Trillion Dollars by 2027.” Goldman Sachs Insights. Accessed January 27, 2025. https://www.goldmansachs.com/insights/articles/the-creator-economy-could-approach-half-a-trillion-dollars-by-2027.html.
Investopedia. “Social Media.” Investopedia. Accessed January 27, 2025. https://www.investopedia.com/terms/s/social-media.asp.
