Social Media Snake Oil

By now, we’ve all probably heard of the Tiger King, but you probably haven’t heard of the Rattlesnake King.

In 1893, at the Chicago World’s Fair, a former cowboy claimed to have studied with a Hopi medicine man who revealed the healing powers of snake oil. At the fair, Clark Stanley reached into his bag, plucked out a snake, slit it open and plunged it into boiling water. When the fat rose to the top, he skimmed it off and used it on the spot to create 'Stanley's Snake Oil.’ Unlike the Tiger King, aka Joe Exotic, there was no Carole Baskin to stop the Rattlesnake King.

20 years later, the FDA seized a shipment of ‘Stanley’s Snake Oil’ and found that it primarily contained mineral oil, a fatty oil believed to be beef fat, red pepper and turpentine. Sit tight for the ultimate shocker — Stanley's signature product did not contain a drop of actual snake oil.

Isn’t it ironic (shoutout to Alanis Morissette) that over a hundred years later, and we still have trouble identifying the snake oil salesman from something real?

Social media has created an entirely new frontier for hucksters and charlatans to prey on the unsuspecting. Some of the most egregious offenders offer unsolicited health, medical and financial advice. "You can be your own bank!" "The wealthy don't have mortgages!" "Investing is gambling!" This is as ridiculous as Bayer selling heroin to cure your cough. Your health and wealth are two of the more difficult, and potentially most costly, things to repair.

A recent research study from the Swiss Finance Institute (SFI) sheds light on how to identify the snake oil salesman in our midst. The SFI research report reviewed 29,000 accounts of “finfluencers”, or social media influencers who offer advice and information on various financial topics, many of whom are not appropriately registered with the SEC. The report found that 72% of “finfluencers” either provided advice that was not helpful (i.e. had no affect) or was harmful (negative, or anti-skilled). You probably have better odds self diagnosing through WebMD.

While 72% sounds alarming, what was more troublesome was that anti-skilled finfluencers had more followers on social media and were far more popular than the few “skilled” accounts. They're not tweeting into the void to their 6 followers. No, there are millions of people who are taking finfluencer advice as gospel, to their own detriment.

What's important to remember about any financial advice you see, hear, or read on social media is to take it with skepticism and avoid acting solely on that reel, tweet, or Instagram story.

It's best to look at finfluencers the same way as Web MD. It can be helpful and informative, but in most cases, can be easily misinterpreted and misapplied.

When a doctor prescribes a medication it is done within the context and understanding of your medical history, vitals, allergies, and all of the things unique to you.

Financial advice needs to be equally contextualized to your financial situation, circumstances, and sensitivities. Sure, there is some advice out there that may be helpful. I've had first hand experiences where a client has brought up an idea they saw on Tik Tok, and it ended up working out. But those are far and away the exception, and not the rule.

Something I love about our team is that we are all eager to learn about new developments, innovations, and strategies. We pride ourselves on staying on the cutting edge and pairing that with decades of experience. There are few stones that we haven't turned.

Should you run across something that strikes some interest, give us a call, text, or email. We're always happy to chat and discuss its merits. Let us help you avoid the snake oil salesman.

We’re grateful for you and your continued trust and confidence. Should you have any questions, feel free to reach out to our team! We're always happy to connect with you.

Many thanks,
Tyler Martin

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Many thanks,
Tyler Martin, CFP®, CPWA®