At first glance, Kim Kardashian, Snoop Dogg and Siya Kolisi have little in common, apart from their celebrity. Yet, all three enjoy the dubious status of financial services influencers. Maybe this is not as odd after all, given the collective wealth of the triumvirate, but the question remains, would you buy a financial product based on their endorsement? All three are iconic in their fields. Snoop is arguably the world’s best-known rap star, while over 330 million followers keep up with Kim Kardashian and Siya has risen to global rugby icon status from humble beginnings by leading the Springboks to glory in the 2019 rugby world cup.
Indeed, it is the power of their influence that makes them such sought after hot property for advertisers. It is perfectly understandable that companies would seek the endorsement of Mr Dogg for say, gold chains or marijuana, and Ms Kardashian could rightfully be associated with pyjamas and plastic surgery, and Siya with ‘men’s stuff’ such as deodorant. Yet their endorsement of financial products and services is a stretch too far. In my view, the endorsement of such influencers is irresponsible, reckless and potentially dangerous.
Finance and personal finance in particular is a serious business. The investment choices made by an individual can and do impact their life chances, as well as those of their families. Moreover, there is never a shortage of get-rich-quick schemes in the market place offering dizzying returns to the greedy, vulnerable or, in the case of our celebrity trinity, starry-eyed followers. Personal financial planning and advice is not only a serious matter that needs to be approached soberly, but it is an increasingly complex field, requiring more highly skilled and qualified personal investment specialist advisors than ever before.
One of the emerging risk areas for personal investment is crypto currency and it is into this asset class that the likes of Snoop Dogg, Will.I.Am, Akon and Shaquille O’Neal have ventured to endorse products that one suspects they have very little detailed understanding of. Given that each is a dollar multi-millionaire many times over, perhaps they could ‘take a punt’ on crypto without being overly concerned about the security or volatility of their investment. But it is quite a different matter to be endorsing a risky financial product such as crypto currency to your millions of followers, fans and admirers – rich and poor.
So, it was a welcome development to read this week that the Unites States Security Exchange Commission (SEC) imposed a $1,26 million fine on Ms Kardashian for sharing a promotional message regarding an obscure crypto token called ‘EthereumMax’ for which she was paid a handsome $250, 000. This is not the first time that the SEC has fined a celebrity or influencer for promoting a financial product or service, but what was notable in this case was that the SEC turned the Kardashian social media brand on its head and used this to publicise its action. Unlike the previous below the table settlements imposed on other celebrities, this time, the SEC created its own video of the case and made sure it was posted across the very same media platforms utilised by Ms Kardashian.
Yet the SEC fine raises a further question regarding, for example, the crypto-promoting Tweets issued by Elon Musk, which have the power and influence to literally move the market in these risky asset classes.
So, there’s a long way to go in the regulation of crypto currency, particularly in the protection of personal investment, but this week’s SEC decision to fine Ms Kardashian should serve to warn the public that an investment should not be made just because someone famous says it’s a good one.
Highly qualified and experienced private wealth specialists may not have all the attributes and attractions of celebrities, but they remain the trusted pillars of personal financial planning.