Finance

AFM: beware of influencers who give risky advice about cryptos

Anyone who has never invested before and is looking for advice will come across numerous influencers online on Facebook, Instagram and Youtube who will take you by the hand. Those influencers are sometimes very convincing. The Netherlands has gained half a million (young) investors in 2 years and ten percent of them indicate that they started thanks to a recommendation or information on social media.

But blindly following these online advisors is not very wise. The influencers often do not comply with the rules, according to an investigation by the AFM.

Risky products

The regulator has surveyed the 150 most prominent influencers. The AFM concludes that almost all these influencers use a risky working method. For example, they provide investment advice without a license, even though they are required to have one. In addition, they promote risky products, such as cryptocurrencies.

And sometimes they also benefit from it if their public makes that risky investment, without communicating openly and honestly about it.

Tapped on the fingers

The influencers in question have since been reprimanded. The supervisor sees the exploration as a first step; In the coming year, the AFM will conduct targeted follow-up investigations into specific influencers.

If you still don’t follow the rules, you may have a problem. “If necessary, the AFM will take enforcement action,” according to the report.

No financial education

In addition, the AFM also wants to warn (beginning) investors. “If it’s too good to be true, it often is,” said spokesman Mark Woldberg.

Many influencers have no financial education at all and earn money from their advice. “So keep thinking carefully for yourself,” said Woldberg.

85 percent evaporated

Youtuber Elroy Heisterkamp (25) also knows that you have to be careful when you start investing. He bought crypto in 2014 and saw his portfolio evaporate by 85 percent overnight. And it could have turned out worse. “If I had kept the cryptocurrency in question, I would now have nothing.” The Youtuber does not want to say how much he lost exactly.

Since that painful episode, Heisterkamp says he has started to delve more deeply into investing in cryptocurrencies and the associated risks. In 2017 he started his own YouTube channel, which now has 4.9 thousand followers.

Analysis

In the videos, Heisterkamp, ​​who studied economics at a university of applied sciences, analyzes the crypto market: why the bitcoin decreases or increases in value, for example, and what it will do in the future. In the video below he discusses bitcoin.

But an influencer? He doesn’t see himself that way. “I also say it in my videos: this is not financial advice and I am not a financial advisor. I teach people to read charts, do analysis, I look for signals when an increase can turn into a decrease.”

All to prevent other young people from making the same mistake as he did seven years ago, says Heisterkamp.

fomo

According to the Youtuber, young people should be protected a little more against themselves. Young people suffer from ‘fomo’, he sees: fear of missing out. They are afraid of missing the boat. “They hear from one person in the class who has made money and then all step in when the market is high. They don’t know a falling market yet.”

Heisterkamp thinks that protection can come in various forms. He points, for example, to the built-in threshold at investment platform De Giro. “You first have to answer questions there to check whether you know what you’re doing. If you don’t get the questions right, you won’t get access to the platform.”

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