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Chapter 1: Where do young people go for financial advice?
Now, where do you go for financial advice? The answer for many young people is to social media influencers. And there are worries that this may not be a good thing. These finfluencers, as they've been called, are not regulated and the quality of the advice has been questioned. For more on this, I'm joined by Charlie Western, personal finance editor with the Irish Independent. Morning, Charlie.
Good morning, David. Finfluencers, who are they and what are they about?
Yeah, there's these social media creators who offer advice, sometimes tips, opinions on money management. They'll give you advice on investing and on debts. We're talking here creators on TikTok, Reddit moderators and YouTube personalities. And there's been an explosion in the numbers of these around and they for that generation in terms of looking for financial advice.
I mean, the first protocol tends to be family and friends. This is according to a survey carried out by pension trustees, the independent trustee company. They found social media as the second biggest influence on young people when it comes to financial advice.
Okay, and presumably these people have solid backgrounds in finance before they start offering advice.
That's the problem, David. You hit the nail on the head there. Often they don't, you know, they have no background. They're not regulated by the central bank. I mean, if you go to a mortgage broker, if you need to talk to someone about a pension or investing in a fund of some kind, they have to be regulated by the central bank.
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Chapter 2: Who are finfluencers and what do they offer?
You know, they're rigorously scrutinized. Many of these people will complain to you about what they would call heavy-duty regulation, but... It's there to protect people. If something goes wrong, you can call on the investor compensation fund. You know, the central bank can get involved. If it's misleading selling the consumer protection people, the CCPC can get involved.
With influencers, unfortunately, it's the Wild West. Now, I don't want to be unfair. Some of them are actually very good, David, and they do offer good budgeting advice.
you know that envelope budgeting thing where they encourage young people to you know to have different envelopes and put some money in there for your rent for some money in for food some money for entertainment and kind of allocate money and plan out your spending but sometimes you know the the social media influencer world can be a kind of cesspit and it's breeding ground for misinformation false advertisements and fraud they're not telling you sometimes that they're
You know, it's a sponsored post and they don't discuss their own expertise or tell you the downside sometimes or give any links to sort of credible sources for where they're getting their information. So people need to be very cautious and careful.
Yeah, I mean, I can imagine there's a lot of advice about crypto and so on that may not be entirely reliable.
Yeah, exactly. You know, I mean, it just seems extraordinarily dangerous to be taking advice on an investment in the likes of these sophisticated things like crypto or derivatives, you know, or foreign currencies, which, you know, some social media influencers or finfluencers will promote. You know, I've been spending a long time writing about finance.
I wouldn't consider myself remotely qualified financially. to look at an investment in something like derivatives. It's a complex product and it's really for professionals. But you will get social media influencers promoting those kind of cryptocurrency.
Every central bank will tell you, and Gabriel McClough, the governor of the Irish central bank, is forever worrying about cryptocurrency, saying, look, we don't know what influences it has up and down. It can swing wildly. It's very volatile. You need to be extremely careful investing in that. But social media influencers, There needs to be caution here.
Yeah, and you don't know where they're based either.
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Chapter 3: Why is the credibility of finfluencers questioned?
Yeah, there's a whole suede of these bank impersonation texts going around. Basically, you get a text saying, this is Bank of Ireland, if you're a Bank of Ireland customer. I got one as an AIB customer. It told me that there was a questionable expenditure on my credit card of ā¬399 that they'd blocked this, and they suspect there was fraudulent fraud.
and my card was now going to be suspended, I needed to ring this number and the number was provided. Now, your bank won't do that. They will not tell you to ring a number. You know, if I rang that number, I would be encouraged to give over details about how to get into my account and to transfer money. I mean, the advice here on this one is zero trust. You get something like that,
Don't ring the number that's provided. Independently seek your bank number. It'll be on your card anyway. Ring the bank and say, look, I'm getting this message. Is it dodgy? They will answer and tell you. But these things have become very popular and they're very professional and very well done. They're very easy to fall victim to.
Yeah, I mean, they wouldn't be doing it if they didn't have some level of success.
Exactly. And if you ring them up, apparently the people you speak to are credible and sound like they know what they're talking about and will lead you along.
put money into a safe account now if you're being told to put money into a safe account run a mile so you know and you're talking you know the bank of ireland gave an example yesterday of a customer who lost 10 000 euros they were ready to put money into a safe account and of course it disappeared that was the end of it and people people don't report this as well because they're too embarrassed so there's a lot of this going on and we're only seeing the tip of the iceberg really being reported
OK, just finally, Charlie, diesel prices falling again in recent weeks, bringing those prices closer to petrol at the forecourts. What's going on?
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Chapter 4: What are the risks of following unregulated financial advice?
Yeah, I suppose there's a spike in demand for petrol. It's got to do with the Americans. This is the season when they hop in their cars from now on and they start driving a lot. Petrol prices spike and I suppose more diesel is getting through as well. A lot of the diesel we use in this part of the world is refined in the Middle East. They are finding ways now and getting some of that to us.
We have limited diesel refinery capacity in Europe as we discovered last when the Russian sanctions were imposed, because a lot of it had been coming from Russia. I mean, that hasn't changed a whole lot. It moved really to the Middle East. So I suppose there's more diesel getting through and petrol prices. There's a demand for petrol at the moment, so it's up a bit.
So diesel prices have come back a bit, but petrol not so much. So, you know, it just remains very volatile. And, you know, we just don't know where it's going to go, unfortunately.
OK, well, I'm just looking at the most recent AA fuel survey found diesel at an average of ā¬1.97 a litre down 17 cent from the average in April and petrol was ā¬1.82. So they are getting a lot closer, but we're really we're in the lap of the gods. There's not much that can be done here to affect the price, is there?
Nothing much, no. I mean, the government have probably, you know, they've gone in twice and reduced the excise duty and the Nora levy, you know, the levy to make sure we have sufficient supplies. That has been reduced a bit. So, you know, unless they further reduce the excise duty, you know, and remember, these are only temporary reductions as well. There isn't a whole lot that can be done.
We really are at the mercy of the international trading price, unfortunately.
Yeah, and even if the prices have come down a bit, they're still a lot higher than they were before the war in Iran.
They are, yeah, they're way up. And that is a problem for people. You know, aren't people who have EVs now feeling happy and they're not so affected. Electricity prices are going up, but nothing to the extent that fuel and petrol and diesel went up in the last few months.
Yeah. OK, Charlie Weston, personal finance editor with the Irish Independent. Thank you so much for joining us this morning. Back after this.
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