If you haven’t had the chance to check out Clubhouse yet, that may be because you have never been invited. Yes, this new social media app and network is invite-only, so it’s a little more exclusive than, say Instagram or Snapchat. Clubhouse is also made up of audio-based chat rooms instead of text, which means you can show up and actually “listen in” to what people are saying instead of reading their thoughts in the written word.
Like TikTok and other major social media networks, Clubhouse is filled with all sorts of people, from voyeurs to wanna-be 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 tips to get rich quick.
Clubhouse money conversations are definitely reaching new audiences, but is that good or bad? By and large, 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 host, and that’s true whether we’re talking about YouTube, TikTok or Twitter. Pretty much anyone can proclaim their expertise and suggest any financial strategy they want. They don’t really have to back up any claims they make, and people often misrepresent themselves in order to build up clout.
Clubhouse enthusiast Michael Freeby says he has seen and experienced the “hyped” financial advice firsthand. While Clubhouse skews toward the older demographic, there are buzzwords that pull people in.
Where the younger generation is inundated with influencers with veneers hawking teeth whitening services, Freeby says the older Clubhouse users are more likely to fall prey to the snake oil salesmen with a clickbait title telling them they’ll become a millionaire fast.
In either case, there’s a good chance the Clubhouse “influencer” is lying or at least stretching the truth.
“I’ve been in so many rooms that I’ve seen many of the Clubhouse users making these claims say they’re a millionaire offering advice in one room and discussing how heavy in turmoil they are in the next,” says Freeby.
Financial advisor Julian B. Morris of Concierge Wealth Management says this all boils down to the fact that Clubhouse and other networks are used by very few licensed financial planners and professionals. That becomes a problem since an influencer’s job is to influence instead of giving real, actionable advice people can use and benefit from.
Not only that, but Morris points out that an influencer on Clubhouse doesn’t have a fiduciary responsibility to the participants in the room.
“There is no reason to trust the advice preached in a chat room or a TikTok video is in your best influence,” he says. “I have yet to see an influencer who is a fiduciary, someone whose job description means the interest of the client comes before their personal financial gain.”
When To Take Money Advice From Clubhouse
While Clubhouse comes with the same pitfalls as other social media platforms, financial planner and Senior Manager Brian Walsh of SoFi says that these non-traditional platforms have opened the door for millions of people to be exposed to topics that are crucial to understand. Further, there are rooms for beginners, specific interests, and certain affinity groups.
Walsh says that, as a result, a beginner could use this as a safe way to learn about personal finance basics without all the jargon used in the industry. Meanwhile, investors can use this as a way to learn about different strategies that others are considering before they do their own research.
With that being said, Walsh says it’s important to look for qualifications and experience, which should be easy to do if the person sharing financial information on Clubhouse is established in their career.
“While you don’t have to dismiss someone without credentials immediately, a lack thereof signals you need to do more research and make sure the individual is trustworthy and a fit for your financial needs,” he says.
For example, if you came 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 look up the person you’re listening to, you should also make sure the advice aligns with your life, says Walsh. He adds that many topics that drive engagement are not appropriate for most people. For example, new and exciting investment strategies like NFTs sound amazing, but most people should make sure their financial basics are figured out before they spend time learning about alternative investments.
“If you are earlier in your financial journey, skip the investing focus and find 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 other discuss financial literacy topics. Bobbi Rebell also hosts a weekly room called “Money Tips For Grownups” that covers a broad set of financial education topics.
Remember that general financial advice is rarely ideal for your individual situation, says Arielle Kimbarovsky of M1 Finance. And personal advice is not something you will likely 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’s customized to you, your finances, your life goals, your risk tolerance and even your values, and the best people to follow advice from on Clubhouse, in my opinion, are the ones who are open about that concept,” she says.
“Seek out experts who acknowledge their success may have worked for them and not for you, and who devote more time to explaining their thought process than just listing off a handful of stocks.”
Finally, financial advisor Cody Garrett of Measure Twice Financial says to remember the difference between financial information and financial advice.
Where financial education provides objective fundamentals and shares information from reliable sources, such as the IRS or academic publications, financial advice provides actionable recommendations.
Garrett says to listen to influencers who focus on financial education rather than dogmatic advice. He also recommends looking out for phrases such as “always do this” or “never do that.”
“This is a key sign that the message disregards the personal side of finance,” he says.