From Followers to Traders: Finfluencer Credibility, Digital Trust, and Investment Decision-Making among Retail Investors

Abstract

Purpose: The purpose of this study is to explore how financial content creators and social media influencers impact individual trading behaviours, especially among youth, by shaping risk perceptions, promoting online trading and betting apps, and influencing impulsive financial decisions through unverified advice, potentially increasing vulnerability to scams and financial missteps.
Design/Methodology/Approach: The study adopts a quantitative approach using primary data from 237 young individual traders and investors active on platforms like YouTube and Telegram. Responses were collected through purposive sampling. Data analysis was conducted using SPSS and AMOS, employing descriptive statistics, correlation, regression, factor analysis, and Structural Equation Modeling (SEM).
Findings: The findings reveal that frequent exposure to financial influencers on YouTube and Telegram significantly impacts individual trading decisions. Influencer promotion of betting/trading apps increases the likelihood of investing in high-risk platforms. Trust in unverified social media financial advice strongly correlates with impulsive, often misinformed, trading and betting behaviour among youth.
Conclusion: The study concludes that financial content creators and social media influencers significantly shape individual trading behaviours, especially among youth. Their promotions drive risk-taking and susceptibility to scams. Psychological factors like trust and frequent exposure to unverified advice contribute to impulsive and misinformed financial decisions, highlighting the need for regulatory oversight and financial literacy.
Originality/Value: This study provides valuable insights into the influence of financial influencers on individual traders' investment behaviours, particularly among youth. It highlights the psychological and behavioural factors driving impulsive decisions, offering critical implications for financial literacy, regulation, and investor protection strategies.