Uncensored Money Season Three: Finfluencers, Money Mindset Coaches, Educators, Advisors & More

Melissa Browne: Ex-Accountant, Ex-Financial Advisor, Ex-Working Till I Drop, Now Serial Entrepreneur & Author, Financial Wellness Advocate, Living a Life by Design | 13/04/2022

Show Notes

In this solo episode, Mel discusses the differences between people who play in the finance space; finfluencers, money mindset coaches, financial educators, advisors and more.

She also talks about the different roles they play and how they make their money so you can make an informed decision about who to listen to.  

During this episode, Mel mentions a download of 9 popular investing apps. You can find it here: https://www.melissabrowne.com.au/investingapps  

If you know you need more help with your finances make sure you sign up to the waitlist to be first to know when we launch the next round of the My Financial Adulting Plan.

If you're not already, come play over at insta at MelBrowne.Money and make sure you are signed up to Mel's Money Musings and Monday Money Moments (yep, we love us some alliteration) for more tips, tricks and ideas on how to best work with your money.

Finally, if you love this episode please make sure you subscribe and leave us a review.

Transcript

Mel: So there was a lot of noise last week around ASIC coming out and warning finfluencers that they need to get a license or risk five years jail, and I wanted to do a podcast episode on what the different people are that are playing in the money space, because I think there's a lot of misunderstanding.

There's a lot of people not understanding. Well, what's the difference between someone just sharing on their social media account how they're going and some tips and tricks with their money, like why is that problematic? All the way through to money mindset, coaches, financial educators and even financial advisors.

So I wanted to talk today about what the different roles of the different people are, how they potentially make money, and then for you then to go away and make up your own mind as to who you'll be dealing with and both listening to, but also giving your hard earned cash to. But also understanding there may be a place in your financial world for all of the different players in some respect and just as well to talk about why ASIC has such a problem with finfluencers, and also to let you know what I think about it. So let's jump into it.

Let's start with finfluencers seeing is probably that's one that all of the noise has being made about.

So a financial influencer or a finfluencer, as they've been given the term is someone that is talking about money on social media. So that's their platform. That's where they're doing it. And for them, generally, a finfluencer will be someone younger. Often they start off by sharing their own financial journey.

So it'll be, this is how this is my journey towards investing, or this is my journey towards being financially free. Or this is my journey towards being debt free. There's a huge debt free community. There's a huge fire movement. There's a huge investing movement. So it might be in one of those different camps, for example.

And on the whole, that hasn't been problematic except what's happened in the last couple of years, particularly since COVID, is suddenly we're all talking about money and more of us are interested in money, which I think is only a good thing. And because there is this rush on social media to, oh wow, who can I go to listen to money?

 There is particularly some young finfluencers who ended up with quite large social accounts. Of course, when you have that, a couple of things are gonna happen. First of all, you're gonna have platforms and apps and different ones approaching you and saying, hey, can we work together? So can we give you an affiliate link? Can there be a sponsorship arrangement? Can you speak, et cetera? Could you be an ambassador? And on the flip side of that, you might also have, uh, someone that looks at that and oh, okay, how could I monetise that? I've got this large following of people listening to me. How could I monetise that?

And it's a really tricky one, because for example, let's look at Afterpay. Afterpay is a financial product. It's not an investing product, but it's a financial product. Afterpay use Rebel Wilson as their spokesperson. ASIC don't have a problem with Rebel Wilson spooking Afterpay's profit and being paid craploads for doing it, despite it being an inherently problematic, um, I, would argue predatory, product

Yet ASIC have looked over at these young finfluencers and said they actually called them into a meeting last week and said, hey, you actually now can't do this anymore. And my concern is that ASIC have gone too far and said, actually you can't talk about money. So part of me understands and absolutely when it comes to affiliate links and commissions, I absolutely applaud the decision. Cause I don't believe, I think that if you are gonna trust someone's advice, I don't care if their financial advisors, I don't care if their planners, I don't care who they are, the fact that you've received dollars for it can and potentially will sway my opinion of you if I've realised that you're receiving money for sharing about a particular product.

And that's where ASIC has the problem with affiliates and commissions. So my concern though, is I think that there already is shame and scarcity and vulnerability when it comes to talking about money. We certainly don't talk about it enough and certainly nice girls don't say that they want it., There is too much of this good and bad when it's attached to money. So people sharing their financial journey, I think is only a healthy thing. And my concern is that there's a muzzle being put on people when really money should simply be just another thing that we talk about.

I absolutely agree, when it steps into advice it's problematic. I agree when it steps into things like affiliate payments and commissions, I believe that's problematic. Now finfluencers will argue that they're no different than any other media platforms and they should be able to advertise. And I guess if it was a podcast that you had, and it was clear that it was an ad in the middle of a podcast in the same way that Mamamia, for example, when I was their host on What The Finance podcast, they had Westpac, so they were doing it.

So therefore, if it's an obvious ad, part of me thinks, okay, well, if this is an ad and it's a media platform, then what's the problem? I feel like ASIC in the same way with the Banking Royal Commission and when different things happen, they tend to the pendulum swing really hard. So that's the situation that finfluencers are facing at the moment.

But I think that following people on social media who are sharing their journey, when it comes to money, reading books, listening to podcasts. Those things are all super helpful. It's just being aware of when are you being influenced to buy a particular product because of what the person's speaking about? Are they being renumerated for it? And do you know enough about that particular product to go ahead and purchase that, or are you just relying on the person say so that you're following on social media? Cause really that's no better than going to your next door's gardener and saying, oh wow tell me about your latest hot tip.

So I guess that's where ASIC has the problem with it and it's just kind of making up your own mind. I think I would really like  finfluencers to be able to find their place in the world of money, cause I feel like if we could remove the affiliate payments in the commissions and make it clear that there is advertising and that maybe they come up that they're a media platform, that it might be something where it's some common ground, but who knows? I think this will be something that's played out over the next couple of years, cause ASIC hasn't had to deal with social media before obviously.

But the next lot of people are things like money mindset coaches and also wealth coaches. So these two people will often not talk to you interestingly about the minutiae of money at all. They're mostly interested in mindset and they're mostly interested in you understanding why it is that you are behaving with money the way that you are.

So different than finfluencers in that finfluencers will often be sharing their financial journey. Money mindset, on the other hand are really interested in why are you behaving with money the way that you do? And I guess if you are going to someone with that, it would be because, you know, you realise that you're in a sabotage loop and you can't figure out how to get out of it.

Then you can simply follow one of these money mindset people on social media or what have you. And that can be that reminder for you without actually having to purchase. But I think talking about money is important. I think money mindset's really important. I've been talking about that for the last decade. Certainly it was in all of my books. So when I was writing for Fairfax, I was talking about it a lot. And in the course that I have the, My Financial Adulting Plan, we spend two of the eight weeks on it, because I believe until you understand who you are, then actually you're gonna end up in that same unconscious behaviour, perpetually frustrated with how you are behaving with money.

So money mindset and coaches sit separately. They'll often, as I said, not talk to you at all about any minutia to do with money. It's more around, but why are you doing that? And what's your reason behind that and kind of just holding up a mirror so you can see your bias and really turning those unconscious assumptions into conscious.

So then you can rewrite them or do something about it and ultimately change your behaviour.

Now a different group and one that I classify myself in are financial educators. So I used to have a financial services licence. I used to be a financial planner and I handed that back cause I worked out in the end a) it costs you a lot of money if you wanna come to a financial advisor to jump through all the hoops, so I was having to charge at least three grand. But the licensing group that I was a part of ended up saying to me, you know, you don't need a financial licence to do most of what you do. In which case I went you're right. This is not worth the hoops that I have to jump with. I just won't talk about all of those things. So what I do is I educate you about finance. So things like cash flow and budgeting, things like debt, things like how to create your very own financial plan. So for example, in my course, we spend the first two weeks on understanding who you are. We spend week three on coming up with great financial habits that are right for you, bank accounts and automating and all that sort of stuff. So we don't recommend bank accounts, but we talk about the number of bank accounts you should have and the type of bank accounts you should. And then we give you a template to create your very own financial plan, which is our amazing Excel, template. And we teach you how to fill that for yourself, everything from where you are now to where you wanna go. What is the gap look like? You're able to put in what it would look like in three years time or 10 years time. You're able to put your goals in. That allows you to automate your savings to your bank account, and your bills account and your everyday account.

But we've also got calculators there around how much money will be enough, and so much more. So we do have three modules on understanding how to grow your money, and that includes our business. So I've grown a lot of wealth through business. So it's understanding pricing, understanding the numbers are more.

Property, so understanding everything from rent investing to checklists to buying your own home and investing. As well as giving you scripts for how to ask for getting a rate decrease, et cetera. And then we have one module on shares where we simply give checklists on what to look for if you are looking to invest. What's the difference between an ETF and a managed fund? You can get a lot of this information online, so you can go to Moneysmart and you can go to Canstar you can go to Money Magazine, you can read books or you can come and figure it all out from the one place. And that's what we do. So we do not talk about specific products ever. We'll show you inside platforms so that you can understand the technicality of how to buy in seller share that we won't ever as suggest that this is what some shares you might wanna consider. We'll talk about diversification. We'll talk about risk versus reward. And we've got a quiz in there for you understanding what your risk profile is.

But again, you'll hear this. I think my favourite answer is always, it depends. Because we simply won't give advice in there. It's simply education in the same way that I think Scott Pape had a book or I've had different books written, and it's educating. But it's coming to the one place so that you can do that.

And then of course you have a financial planner. So for me, my product and products like mine, which to be honest, I don't think there is one, are all about teaching you how to fish. So it's giving you some great tools and resources so that you can go and do it yourself or so that you can go and take it to a financial planner now that you have a language for it. So that you can then understand, and you have your financial plan, so that you can say, hey, these are the goals that I want. Now, can you suggest some products that will help me get there?

But the financial advisor's place is for people one, who just don't understand. I see that it very much as a, if you've got time and the inclination, you might do it yourself. And I absolutely think it's possible for you to do your own investing.

But if you don't have the inclination or you don't have the time, then it might be about paying a financial planner to do it for you. And some people as well, just like accountability where it's, I've never needed a personal trainer, I've always known that I can do that myself. Whereas some I've got friends that unless they pay a personal trainer, they won't show up. So having either a wealth coach or we offer accountability after our course is over. So you get that in those two places as well, but sometimes paying a fee to a financial advisor can feel like that accountability of ugh, I'm being watched, but being watched more than say I would, cause I don't see your finances necessarily. In that you are having someone do it for you, but of course, that there comes with a fee with that right? And I would say if you're thinking of using a financial planner and we have lots of people that have gone through My Financial Adulting Plan and still gone on to use a financial planner, we encourage them to date a few.

Because I too, I do believe that not all financial planners are equal in the same way that not all accountants are, not all mechanics are et cetera, et cetera. So it's finding a great one that's right for you. And questions I would ask, going back to that very beginning is, do you take affiliates? Do you take commissions? Are you independent? How do you invest? If ethical investing is important to you, I'd ask them about their opinion about that, etc.

And then I guess the weird side one is things like robo investing. Investing apps where there's talk of that kind of taking the place of financial planners, where that robo investing that is kind of done for you.

So again, we're seeing more and more things that ASIC having to deal with because they simply didn't exist even, you know, 3, 4, 5 years ago. But robo advice is a very low cost, low monthly fee because it's not engaging a human to do it. You know, they might not be able to give you the odds of doing things or talk to you and say, what's right for you.

But essentially their low cost online investing platform that employs software algorithms to create and manager investing portfolio. So I guess that's kind of a step out, but it also is worth mentioning in this financial advice or rather financial advice - it's so the wrong word - this money world.

So to wrap up. So finfluencers, if it was me, and if I was looking to start my money journey tomorrow, I would absolutely be following people online that were sharing my money story. Cause that's gonna encourage me to be doing it myself. And it's gonna keep it front of mind for me. It's like anything, right? I wanna buy a white car suddenly you'll see white cars everywhere on the road.

If I wanna get fit, I'll start to follow a whole bunch of social accounts to give me motivation to get fit. It's the same with money. You might follow a whole bunch of accounts to encourage you to keep going with your money journey. You may consider someone to help you with your mindset or a coach.

If you need that extra accountability and you're not quite ready for a financial planner, or you might go to someone in between those two and look to someone like myself, as a financial educator where it's teaching you how to create your own financial plan. So I see my role is increasing your financial literacy so that you've got the financial confidence to make the right decisions for you.

We know that for women, the latest HILDA report showed our financial literacy sitting at 48%. For the blokes at 63%. So for me, increasing financial literacy is really important. It's just in this new world navigating that around ASIC, around making sure that advice isn't given that affiliates and commissions aren't received and more. Certainly for me, I've said publicly, I won't ever accept, you'll never see a sponsored post. You're never gonna see commissions received, etc. Because for me, I want you always to know that anything I'm talking about is simply because it's something that I use. But it actually, interestingly, I don't talk about, I'm just thinking it as I say that. Cause I'm like, I don't talk about any of that. What we tend to do is aggregate instead. So I wouldn't be talking about a particular financial platform for example, but we had a download and we'll put it in the show notes a couple of months ago where it was the nine top most popular investing. So we're not saying that we like any of these. All we did is we created a table that really simply and succinctly compared the nine most popular investing apps.

So everyone from EToro to ComSec Pocket to Shareies to Self Wealth, to Pearler and more. And it compared everything from their fees to how much could you invest benefits and features. Are they CHESS sponsored? How can you invest? And more. And I guess that example is the perfect example of what I see my role as a financial educator as is increasing your financial literacy so that you can make financial decisions without me having any advocacy at all, as to what that decision should be. It's more around, here's the education, here's what all those different things mean, this is what CHESS sponsorship means, this is what fees mean, this is some things to be aware of, this is the pros and cons perhaps. And then go away and decide for yourself, which is why I literally have tote bags with "it depends" made.

So last night, one of the young finfluencers actually put a story up suggesting that I was really happy and celebrating that finfluencers had been clapped back ASIC. And I actually contacted her and I said, hey, this is such a small world. If ever, we are thinking that of each other, have a chat rather than particularly calling me out. Because as I said at the beginning, I think that it's really important that women aren't muzzled when it comes to talking about money online.

I think finfluencers, I think the name itself shows the problem. It's influencing you. But where it's simply influencing you to give a shit about your money by sharing their financial journeys, then I'm gonna be hard-pressed seeing the problem with that.

Because, as I said, one of the things that COVID has done is I saw pre COVID too many people not care about buffers. Too few women investing. Too few women caring about money.

And certainly the trend since COVID, suddenly women particularly are keenly aware that they need to do more. And if following someone online is going to encourage them to keep looking and keep going with their finances, I kind of don't have a problem with that.

But I have a problem of course with how you're getting paid for that.

So I hope you understand the difference between the different type of people in the financial world and where they fit. And then the question for you is just asking, what do you need? Where do you need to go? It's and chances are the answer is a little bit of everything. It might be following some people online. It might be listening to some podcasts like this one. It might be doing some financial education, like my own, where you'll also get the accountability afterwards. That you might get with something like a coach, or it might be engaging with robo investing or even a financial planner. But again, that's all the different types of people. That's how we all interact. It is a very small world and it's really cool to see. The very first financial conference for the licensee that I was under. And I've told this story. It was primarily men in that room. They presumed we were BDM, the business managers. So they presumed that Lawsie and I were business managers, meaning that we weren't financial planners, we were there to sell product.

And at that first conference, they had things like Sergeant at Arms and they were fining people. It was so blokey. And again, at that first conference, a rape joke was told from the stage and I'm talking less than five years ago. This is not a decade ago. This is less than five years ago. So to see more and more young women talking about money, kind of never gonna hate it.

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