New social media app is a hotspot for personal finance conversations

If you haven’t had a chance to visit the Clubhouse yet, it may be because you’ve never been invited. Yes, this new app and social media network is invitation-only, so it’s a bit more exclusive than, say, Instagram or Snapchat. The clubhouse is also made up of chat rooms based on audio rather than text, which means you can show up and actually “hear” what people are saying rather than read their thoughts in the written word.

Like TikTok and other major social networks, Clubhouse is filled with all kinds of people, from voyeurs to aspiring influencers to true professionals trying to build their brands. And like other social media platforms, Clubhouse features its share of money experts and “influencers” who use the platform to explain their financial philosophy or share get-rich-quick tips.

The clubhouse money talks are definitely reaching new audiences, but is that good or bad? Generally, that depends on who is listening, who they are listening to, and what they take away.

The problem with social media and money

All social media platforms have the same problem when it comes to the financial advice they provide, and that’s true whether we’re talking about YouTube, TikTok, or Twitter. Virtually anyone can proclaim their expertise and suggest any financial strategy they want. They don’t really have to endorse any of the claims they make, and people often misrepresent themselves to gain influence.

Clubhouse enthusiast Michael Freeby says he has seen and experienced “publicized” financial advice firsthand. While Clubhouse leans toward the older demographic, there are buzzwords that draw people in.

Where the younger generation is inundated with influencers with veneers selling teeth whitening services, Freeby says older Clubhouse users are more likely to fall prey to snake oil sellers with a clickbait title telling them to be they will become millionaires quickly.

In any case, it is very likely that the “influencer” of the Clubhouse lies or at least stretches the truth.

“I’ve been to so many rooms that I’ve seen many of the Clubhouse users make these claims saying they are millionaires offering advice in one room and discussing how turbulent they are in the next,” Freeby says.

Financial advisor Julian B. Morris of Wealth Management Concierge He says it all comes down to the fact that Clubhouse and other networks are used by very few licensed financial planners and professionals. That becomes a problem as an influencer’s job is to influence rather than give real, practical advice that people can use and benefit from.

Not only that, but Morris points out that an influencer at the Clubhouse does not have a fiduciary responsibility to the participants in the room.

“There is no reason to trust that advice preached in a TikTok chat room or video is the best influence for you,” he says. “I have yet to see an influencer who is a fiduciary, someone whose job description means that the client’s interest overrides their personal financial gain.”

When to get financial advice from the clubhouse

While Clubhouse presents the same difficulties as other social media platforms, financial planner and senior manager Brian Walsh of SoFi says these non-traditional platforms have opened the door for millions of people to be exposed to topics that are crucial to understand. In addition, there are rooms for beginners, specific interests, and certain affinity groups.

Walsh says that, as a result, a beginner might use it as a safe way to learn personal finance basics without all the jargon used in the industry. In the meantime, investors can use this as a way to learn about the different strategies others are considering before doing their own research.

That said, Walsh says it’s important to seek qualifications and experience, which should be easy to do if the person sharing financial information at Clubhouse is established in their career.

“While you don’t need to fire someone without credentials right away, the lack of credentials indicates that you need to do more research and make sure the person is trustworthy and suitable for your financial needs,” he says.

For example, if you come across a Clubhouse financial expert like Bobbi Rebell, Jason Vitug, or Dr. Brad Klontz, you could immediately spot their professional credentials with a quick Google search.

Once you take the time to find the person you’re listening to, you also need to make sure the advice lines up with your life, Walsh says. He adds that many themes that drive engagement are not appropriate for most people. For example, new and exciting investment strategies like NFTs sound amazing, but most people need to make sure they understand their financial basics before spending time learning about alternative investments.

“If you’re earlier in your financial journey, skip the investing approach and look for one that focuses on the basics of financial literacy,” says Walsh.

For example, Jason Vitug hosts a weekly room called “What The Finance (WTF)” where he and others discuss financial literacy topics. Bobbi Rebell also offers a weekly room called “Adult Money Topics” that covers a broad set of financial education topics.

Final thoughts

Remember that general financial advice is rarely ideal for your individual situation, says Arielle Kimbravoksky of Finance M1. And personal advice isn’t something you’re likely to get from Clubhouse, TikTok, or any other social media platform.

At the very least, you should listen to Clubhouse influencers who are credible and honest about the fact that their advice may not even apply to you.

“The best investment strategy is the one that is customized for you, your finances, your life goals, your tolerance for risk and even your values, and the best people to follow Clubhouse’s advice, in my opinion, are the ones who are open to that concept, “he says.

“Look for experts who recognize that your success may have worked for them and not for you, and who spend more time explaining their thought process than simply listing a handful of actions.”

Finally, financial advisor Cody Garrett from Measure twice financial says to remember the difference between financial information and financial advice.

When financial education provides objective foundations and shares information from trusted sources, such as the IRS or academic publications, financial advice provides practical recommendations.

Garrett says he listens to influencers who focus on financial literacy rather than dogmatic advice. He also recommends looking for phrases like “always do this” or “never do that.”

“This is a key sign that the message ignores the personal side of finance,” he says.

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