Rise of The FinFluencer And How They Target Young And Inexperienced Investors

Are Social Media ‘Finfluencers’ Coming For Your 401(k)? Rise of The FinFluencer And How They Target Young And Inexperienced Investors

There’s some fine money advice on the web but, investor beware, they are working off the same algorithms that addict you to cat photos.

Social media’s next victim could be your 401(k).

Finance influencers — or “finfluencers” — are becoming a hot new thing on social media sites like TikTok and Instagram.

This may be the next big content moderation headache for the industry.

People who can translate the strange, technical language of finance and investing into something that is accessible and entertaining are bound to be applauded and well rewarded. It’s really hard to do. Betterment, a U.S.-based advisory firm that targets young and inexperienced investors, signed up a 25-year-old Tennesseean TikToker with nearly half a million followers because he could do it, Bloomberg reports.

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But for every clear-spoken, genuine and decent character on social media, there is a long tail of the mad, bad and outright dangerous. I asked my teenage son if he saw much finance stuff on social media, he smirked and said: “What, you mean like Sigma Male Grindset Culture?” It sounds superficially risible and a lot might be parody, but money-focused social media content can quickly turn unpleasant and wrong.

Social media sites feed you what you appear to enjoy to keep you engaged. This is a tried and tested business model. TikTok’s algorithm sends users down rabbit holes with ever more extreme versions of the content that they like to consume, according to a recent Wall Street Journal investigation.

And what do these online rabbit holes look like in finance? Do they contain ever-more nuanced explanations of the tax treatment of different trust structures? Or something more like astrological influences on crypto prices and “Why your entire pension should go into this three-times levered zinc-futures ETF today”?

People will lose money. Suckers will get burned. Sigma males will LOL.

Regulators aren’t totally blind to what’s going on here. The U.S. Securities and Exchange Commission will soon publish a report into this year’s GameStop Corp. saga — where a struggling retailer’s stock was pumped up on Reddit and Youtube. SEC Chair Gary Gensler is concerned about fraud and market manipulation on social media, but is wary of impinging on free speech when it comes to stock recommendations.

However, this week, securities regulators in Massachusetts fined MassMutual $4.75 million for failing to supervise social media use by some of its agents, including Keith “Roaring Kitty” Gill, a Youtube finfluencer who helped spark the GameStop episode.

But that’s the easy part. Anyone who works for a regulated financial company can be quickly brought to heel through their employer. Another relatively easy part is ensuring that anyone who represents a commercial interest discloses that properly.

The hard part is all the other content — the thousands of accounts that might spout terrible investment advice people may actually follow. Fools and their money are soon parted. And on social media you can reach a thousand fools before your first coffee. Irresponsible, unlawful, or just plain wrong financial advice could explode in popularity if it sounds fun.

Moderating such content might be less traumatic than the job of trawling for atrocity, but spotting bad or incorrect advice requires skill and knowledge. It could be more costly for social media companies.

So far, it is securities regulators concerned with the proper functioning of markets that have taken most interest, but consumer protection and financial conduct regulators should get involved, too.

Financial advice and marketing is rightly heavily regulated. Indeed, the authorities are the biggest finfluencers of all: They have punitive powers that have a more pointed impact than ordinary political voices demanding more be done about, say, hate speech.

When they demand solutions, social media companies will find them.

Updated: 9-16-2021

Wall Street Influencers Are Making $500,000, Topping Even Bankers

Rise of The FinFluencer And How They Target Young And Inexperienced Investors

Austin Hankwitz Shares Videos On Social Media Platforms To A New Generation Of Investors.

Finance firms have long struggled to reach young and new customers — until now.

At first no one could explain why business was picking up at Betterment, a robo adviser aimed at newbie investors. There were about 10,000 signups in one day.

Then Came The Answer: A 25-year-old TikToker from Tennessee was posting videos describing how to retire a millionaire by using the platform.

His name is Austin Hankwitz, and he’s managed to land one of the hottest new gigs: full-time “finfluencer.”

“We were, like, where is this increased activity coming from?” Betterment’s director of communications, Arielle Sobel, said of the sudden increase in customer inquiries. “It was not sponsored by us, so we had no clue.”

Smash that like button, Wall Street: The teens and 20-somethings who steer online conversation — about life hacks, beauty products, Hollywood blockbusters, you name it — are now blazing their way into finance. Influencers like Hankwitz can translate concepts like passive investing or tax harvesting into digestible social media videos using playful twists, music and colorful captions, making investment products and the like feel accessible to millennials and Gen Z-ers.

For the finance industry, partnering with those influencers can be a no-brainer: There’s never been faster and more direct access to that demographic, particularly at a time when retail investing has skyrocketed.

The pandemic left some people with money and time to burn, pushing hours spent on finance apps up 90% in the U.S. compared with the previous year, while downloads of such apps jumped 20%, according to data by analytics firm App Annie. Participation in the stock market through mobile phones also took off, with hours spent on trading and investing apps spiking 135%.

Once Betterment saw the traction it was getting through Hankwitz’s posts, it hired him within a month to plug its services via social media.

Wealthfront, another robo adviser, has partnered with about 15 influencers including Haley Sacks — known on Instagram as Mrs. Dow Jones — according to Kate Wauck, the firm’s chief communications officer.

“Quite frankly, they’re just better at telling our story than we are,” she said.

In The Green

Until last year, Hankwitz was toiling away in old-fashioned finance, working on mergers and acquisitions for a health care company; making TikTok videos was his side hustle. Now, he’s a hot commodity to startups and finance companies eager to reach his 495,000 followers. Some of them have also hired him for marketing advice, had him sit in on chats with the CEOs, and have even invited him to sit on the company board.

Hankwitz charges anywhere from $4,500 to $8,000 per post on his TikTok page. He said Fundrise, a real estate investment platform, pays him every month to post two videos on his TikTok, and also offers him a monthly bonus of as much as $2,000 based on how many people he pushes to the platform.

BlockFi, a cryptocurrency trading platform, offers him $25 per person pushed to the platform through his unique code. And stock trading app Public.com offered him a monthly retainer and company equity for a contract that includes replacing the Yahoo Finance stock charts on his videos with theirs.

Hankwitz estimates he’s funded well over 240 accounts for Fundrise, 1,653 for Public and tens of thousands for Betterment. His unique BlockFi code brought in $268,000 of crypto purchases in a month. In all, he’s currently representing six companies. And for anywhere between $4 and $17 per month, superfans can subscribe to his Patreon channel, where he offers deeper investing and financial analysis. Hankwitz currently has about 1,100 subscribers.

“I was able to quit my job about six months ago to do this full time,” he said.

Hankwitz declined to say how much he brings in annually, but acknowledged that he makes more than $500,000. He also said he’s built a portfolio valued at about $1.3 million since March 2020, in part with the equity received from the brands he represents.

Social media can be a lucrative business for those with big follower counts and the prowess to push customers toward financial products. Creators can get paid anywhere from $100 to $1,500 for a swipe-up advertisement on their Instagram stories to $1,000 to $10,000 for a single post on their feed, according to figures from Brian Hanly, CEO of Bullish Studio, a talent agency for influencers.

On TikTok, the cost of one post can range from $2,500 to $20,000 depending on the video’s virality and the creator’s follower count.

Rise of The FinFluencer And How They Target Young And Inexperienced Investors

To get there, creators have to develop a certain persona — and on FinTok and its Instagram counterpart, there’s enough variety for everyone. Creators from a variety of ages, backgrounds and ethnicities offer advice about how to open a Roth IRA, how to invest in real estate, how trading options makes more sense if you compare it to buying makeup, or how to use astrology to predict the price of Bitcoin.

Take Sacks, aka Mrs. Dow Jones — the influencer with 215,000 Instagram followers. She explains compound interest by comparing it to Billie Eilish’s fame, or Bitcoin to Jennifer Lopez and Ben Affleck’s rekindled romance.

Sacks, 30, began her career in comedy, working for TV host David Letterman and Saturday Night Live producer Lorne Michaels. Learning about money was a struggle for Sacks, but one way to make it more relatable for her was to compare it to pop culture and celebrity gossip. On that premise, she launched Mrs. Dow Jones in 2017, and her following has since flourished.

“I created what I needed, and other people needed it too. If you’re following me, you like pop culture, so we have that shared language,” said Sacks. “If you can understand the human relationship between two celebrities, then you can understand any financial concept.”

Four years after launching Mrs. Dow Jones, Sacks has signed with a talent agency, and has built a team of people, including an assistant and a manager, to help her negotiate six-figure deals with brands. She started partnering with Wealthfront two years ago.

“She’s a financial pop star. When have you heard that take on anything?” said Wauck of Wealthfront. “The way that she relates everything to pop culture is just so genius.”

Sacks is also taking advantage of the recent demand for personal finance content by providing a course on her website, Finance Is Cool. On Monday, her followers will be able to purchase a $115 course designed to teach them how to manage their money.

Among other pop culture references in the course, Sacks used the characters from the TV show “Friends” to guide her followers through building an emergency fund.

Finance App Fun

The number of finance apps among the top 100 non-gaming apps by downloads in the U.S. almost doubled between 2019 and 2021.

Rise of The FinFluencer And How They Target Young And Inexperienced Investors

Other People’s Money

While social media is allowing companies to reach young customers faster than ever, they need to ensure against working with internet stars who are fast and loose with information.

“There’s so much room for growth,” said Hanly. “There’s not enough financial creators out there to basically take on the amount of opportunity that’s coming in, and there’s not nearly enough high-quality, preaching-the-good-word financial creators.”

Personal finance content on social media has gone viral for offering questionable — even flat out wrong — advice, while get-rich-quick schemes have attempted to lure in novice investors. That’s taken many forms, including videos on how to become a millionaire by selling dog beds on Amazon through dropshipping, how using a debit card makes you financially irresponsible, how to “make a lot of money” day-trading foreign exchange or what stocks to buy and when to buy them.

That’s why TikTok tightened its rules. In May, the social media company said it would take action against content creators who post sponsored videos for financial services and products without clear labels. Companies can still pay financial influencers for posts, but the new restrictions are meant to ensure that creators are transparent when disclosing commercial links.

Since then, Betterment said it moved all of the content from its TikTok influencers over to Instagram and Instagram Reels. Hankwitz has not re-entered into an agreement with Betterment for TikTok videos since. Wealthfront said it was optimizing other channels, like YouTube and Instagram, and instead was mostly relying on TikTok’s paid advertising platform rather than posts through influencers.

As fraudulent content and misinformation run rampant and unchecked, financial corporations looking for quality creators are putting in place hefty vetting processes.

Betterment’s compliance and legal teams perform detailed reviews of their social media partners’ scripts. Influencers will then shoot the video and send it back to compliance for a second review. Wealthfront said that it does extensive background checks on the influencers that get selected to partner with them before signing any contracts. It also includes stipulations in the contract that allow Wealthfront to cancel if certain terms are violated by the creators.

The main law that governs financial influencers is the Investment Advisers Act of 1940, which specifies what qualifies as investment advice and who must register with state and federal regulators in order to provide it.

But there’s one exemption that reduces the risk to influencers, according to Joshua Escalante Troesh, a registered financial adviser and founder of Purposeful Strategic Partners: Unregistered individuals can dispense financial advice if they do so through a “publication of regular and general circulation.”

“That legal exemption is where a lot of people are hanging their hats on, until a court case happens, it’s hard to say one way or another,” he said. “Ultimately, it will be the Securities and Exchange Commission or a state going after an influencer for harming citizens in a court case that will determine whether they qualify for an exemption or not.”

Still, anyone who is harmed by financial advice online could sue in civil court, Escalante Troesh said, but whether a punishment is warranted would vary based on the regulators of the case and the state that they are located.

The prevalence of personal misinformation that exists on TikTok and the demand for solid finance advice are what Vivian Tu, 27, a former stocks trader at JP Morgan, believes made her account YourRichBFF blow up as soon as she launched it.

YourRichBFF Creator Vivian Tu.

She published her first video on Jan. 1, telling TikTokers that if they were looking for an account that would help them learn honest finance literacy tips, hers was it. Overnight, her video got 1 million views and within a week she’d amassed 170,000 followers.

It wasn’t long before financial institutions took notice. Wealthfront, Credit Karma, FinTron Invest, Insurify and Tastyworks are among her approximately 10 sponsors. She has more than half a million followers on TikTok and gets paid anywhere from $3,000 to $4,000 per post. For someone with a full-time job, it’s a huge commitment, she said. Outside of her current full-time day job, she spends anywhere from 10 to 15 hours per week managing her account.

“It was very out of the norm. Some people make videos for months and don’t have this kind of scale,” Tu said. “It was around the time folks were getting stimulus checks, people were thinking about money more so than usual and I think people were also very sick of seeing a lot of misinformation.”

Still, on her TikTok bio page, she cautions that her videos are “NOT FINANCIAL ADVICE.”

“Nothing I say should be taken as prescriptive direction,” Tu said. “Personal finance is never one size fits all for everyone.”

Updated: 9-23-2021

Almost Half Of Crypto Owners Turn To Celebs Like Kim Kardashian For Advice

A surprisingly large proportion of crypto owners report they would purchase a crypo asset because it is endorsed by a celebrity or influencer.

A new survey has revealed bleak insights into the apparent willingness of retail investors to follow digital asset advice from the social media accounts of celebrities and influencers.

According to a Morning Consultant survey of 2,200 United States adults, 45% of crypto-holding respondents indicated they would be likely to seek exposure to a digital asset if it is endorsed by a celebrity, compared to just 20% of participants overall.

There were some more promising results, with three-quarters of crypto investors indicating they were likely to invest based on a family member or friend’s recommendation, while 81% would invest in response to advice from a financial advisor.

Almost 20% of all respondents and nearly one-third of crypto owners said they were aware of a post published to Kim Kardashian’s Instagram account spruiking the ERC-20 token EthereumMax (EMAX) in early June. An astonishing 19% of respondents who saw the Instagram ad admitted to having invested in EthereumMax afterward; however, they comprise just 3.8% of the overall sample.

The post and project have been embroiled in controversy ever since. The price of EMAX saw meteoric growth after being announced on May 26 as “the exclusive cryptocurrency accepted for online ticket purchasing” for the cash-grab boxing match between undefeated boxer Floyd Mayweather Jr. and YouTuber Logan Paul on June 6.

While EMAX had traded for as little as $0.00000000073 (nine zeros) prior to the announcement, news of its affiliation with the boxing event saw prices skyrocket above $0.00000085 (six zeros) by June 1 — a gain exceeding 116,000% in just one week.

EthereumMax then shed more than 99% of its value in under two weeks, after which Kardashian published an ad on June 13 to her 250 million followers that highlighted that 50% of EMAX tokens held by the project’s admin wallet had been burned.

While the token was trading as low as $0.000000076 (seven zeros) before the Instagram post went live according to CoinMarketCap, EMAX had rallied to $0.000000235 (six zeros) by June 14 — a 3,000% gain in less than two days.

EMAX has consistently trended downwards since mid-June, with the token last trading hands for $0.000000021(seven zeros) — a 91% drawdown from the local highs that followed Kardashian’s Instagram endorsement.

The incident did not go unnoticed by financial regulators, with Charles Randell, head of the United Kingdom’s Financial Conduct Authority, describing Kardashian’s Instagram post as possibly the single “financial promotion with the biggest audience reach in history.” He added:

“I can’t say whether this particular token [EthereumMax] is a scam. But social media influencers are routinely paid by scammers to help them pump and dump new tokens on the back of pure speculation. Some influencers promote coins that turn out simply not to exist at all.”

Kardashian is not the first celebrity to draw the ire of financial watchdogs for promoting crypto assets to their social media followers and is unlikely to be the last, too.

In 2018, the U.S. Securities and Exchange Commission charged Mayweather Jr. and musician DJ Khaled for unlawfully promoting the Centra initial coin offering (ICO) the previous year.

While the SEC has warned celebrities that they must disclose paid promotions for ICOs on social media, many celebrities are now spruiking their own nonfungible tokens amid the NFT boom.

Updated: 9-13-2021

A New Media Startup Treats Reporters Like Social Media Influencers

Puck was founded by four media veterans in New York.

Julia Ioffe was finishing up a book earlier this year when she decided it was time to get a full-time job. As a veteran of The New Yorker, The Atlantic and New Republic, she had plenty offers. But after more than two decades of working for other people, Ioffe decided to make a bet on herself.

Ioffe is one of the first writers at Puck News, a new media company that aims to cover the four centers of power in the U.S.: Silicon Valley, Hollywood, Washington and Wall Street. Founded by veterans of New York media, Puck News is led by Chief Executive Officer Joe Purzycki and editor-in-chief Jon Kelly. But Kelly and Purzycki stress the company isn’t about a charismatic founder like Vice’s Shane Smith, but its star talent.

Rise of The FinFluencer And How They Target Young And Inexperienced Investors

Kelly has recruited a handful of influential writers to write newsletters and serve as founding partners in his new venture. Matt Belloni dishes on clashing egos in Hollywood. Teddy Schleifer explores the soft power of Silicon Valley billionaires. Ioffe examines the depressing state of contemporary politics.

William Cohan writes about finance. Puck’s contributors include Baratunde Thurston, Peter Hamby, Dylan Byers and Tina Nguyen, and the company plans to add a few more names before the end of the year.

For the past few months, the only way to read any of them was via email. But on Monday, the company will unveil its website that will publish fresh stories every day. Later this month, Puck will introduce a podcast featuring several of its writers. It will also erect a paywall, requiring readers of most of its newsletters to pay for access to stories, live events and personal time with their favorite writers.

The whole venture is a bet on two concepts gaining a lot of currency in media circles: that journalism shouldn’t be free, and that journalists need to be more like social media influencers.

“There is an elite group of journalists who want to be long-form writers, column writers, newsletters writers and want to have a direct connection with the large audiences they’ve amassed on social channels,” Kelly said. “We wanted to create a platform and company that offers the best of all these worlds to the type of creators who value it most.”

By the time she started talking to Puck, Ioffe said she was already getting most of her news from newsletters or NPR. “Why not put my money where my mouth is and produce the kind of content I consume?”

Kelly started his career in the magazine business under Graydon Carter, the legendary editor of Vanity Fair. Glossy magazines were raking in cash, and Carter had assembled a stable of writers such as Christopher Hitchens and Dominick Dunne. But over the past decade, Kelly watched as the magazine business withered.

Marketers shifted advertising dollars from print to Google and Facebook. Consumers canceled subscriptions and opted for free news sites. Journalists left the profession to work in public relations or Hollywood. (Kelly had a stint at Bloomberg Businessweek along the way.)

Kelly left publishing for a beat to serve as an executive-in-residence at TPG, the private equity firm. While working there, he met a few other media emigres who shared a similar view of the future.

The last wave of journalism startups on the internet gave away stories for free and tried to reach as many people as possible. BuzzFeed, Gawker, Vox Media and Vice all claimed to understand the web in a way that legacy outlets couldn’t. That scale looked great when raising money, but it left them vulnerable to the slightest algorithm change by Facebook and Google.

While those web publishers struggled to live up to their once-lofty valuations, the New York Times, Wall Street Journal and Washington Post began signing up paying customers in droves. At the same time, social media had enabled podcasters and journalists to build direct relationships with readers, giving birth to a new catchphrase: the creator economy.

Those two developments produced a new breed of publishers like The Information and The Athletic that charged readers passionate about a specific area like technology or sports. (Max Tcheyan, an early employee at The Athletic, is a Puck co-founder, as is Liz Gough, who last worked at Conde Nast.) It’s also fueled the rise of Substack, a newsletter platform where writers such a Heather Cox Richardson and Andrew Sullivan charge their readers for a personal email.

Puck has bridged those worlds, creating the infrastructure of a news organization while also subsuming its brand to those of individual writers like Belloni or Ioffe. Each of the founding partners owns a piece of the business and is paid a bonus based on how many subscriptions and advertising sales they generate.

A $100 annual fee entitles subscribers to personal emails from the authors and all the newsletters, features and breaking news; moving up to $250 brings all that plus access to conference calls with the authors, Q&As with the staff and invitations to events.

“We really focused on economics to talent,” Purzycki said. “This is their company.” This is where we should note that it is and it isn’t. The company declined to state how much of the company its writers own and has raised about $7 million from private equity firm TPG, which declined to comment for the story, as well as 40 North Media, the media investment arm of Standard Industries.

Rise of The FinFluencer And How They Target Young And Inexperienced Investors

Puck’s pitch has resonated with a number of veteran journalists, who tired of working at conservative, bloated publishers but were reluctant to start a new business entirely on their own. (Thurston, a best-selling author, former editor at The Onion and producer of The Daily Show with Trevor Noah, is a rare exception in that he has a vibrant business of his own.)

“I spent a lot of years building up value and content for others, and I see where the economics of the industry are going,” Belloni said. “To be able to be an owner of that destiny sounds cheesy, but it’s totally true.” Belloni’s newsletter about Hollywood has been a big hit since it debuted, attracting more than 12,000 free subscribers and securing advertisements from major media companies.

Time will tell how many of those customers will pay for a Puck subscription. The number of people willing to pay $100 or $250 a year for a dozen or so newsletters may be small, especially when they already pay for a lot of subscriptions, be it Netflix, Disney+, Spotify or Amazon Prime.

That is one of many reasons to be skeptical. Publishing is a shrinking business, and podcasting is a growing but still industry. Even with subscriptions, it’s hard to make money in journalism. Only a handful of news outlets and individuals have broken through.

And yet society is getting more and more comfortable with paying to read writers they like, such as Cox Richardson and Judd Legum. Puck is targeting a specific audience: the movers and shakers in halls of power.

For Kelly, the idea is to have credibility with newsmakers themselves. For Thurston, it’s personal in a different way.

“I’ve ranted a lot in my tech criticism life about having people work for free to support platforms,” Thurston said. “Having some ownership feels overdue.”

Updated: 9-18-2021

Hollywood Embraces TikTok Stars For TV, Film Projects

Studios are tapping social media-minted talents like Addison Rae and Charli D’Amelio for leading roles in films and television shows.

Hollywood is learning to embrace a newer generation of stars who have a direct connection to millions of fans.

Faced with an aging audience and a younger generation more interested in social media than the silver screen and television, studio executives are increasingly hiring talent made famous on digital platforms, such as Charli D’Amelio and Addison Rae Easterling, known as Addison Rae, two of the most-followed creators on TikTok, for high-profile film and TV projects.

Netflix Inc. paid more than $20 million for the rights to “He’s All That,” a romantic comedy starring the 20-year-old Ms. Rae, according to people familiar with the deal. Ms. Rae has more than 84 million followers on the video-sharing platform, the third-highest among all users. After premiering on Aug. 27, the movie became the top U.S. title on the streaming service and remained near the pole position a week later.

Last week, Netflix signed a deal with Ms. Rae to make additional films.

Rise of The FinFluencer And How They Target Young And Inexperienced Investors

Ms. Rae started out in 2019 dancing and lip-syncing songs with her friends on TikTok, while Ms. D’Amelio gained followers for her dancing videos, which she also began posting in 2019. Millions of other users have copied their dance moves and styles on the platform. Ms. D’Amelio has about 124.5 million followers on TikTok.

“The studios and streamers understand the power of social media,” says David Freeman, co-head of digital media at Creative Artists Agency, one of Hollywood’s most powerful talent agencies that represents many stars that gained notoriety on digital platforms like YouTube and TikTok.

An eight-episode documentary series featuring Ms. D’Amelio and her family launched on Walt Disney Co. ’s Hulu streaming service this month. Last year, Disney secured a deal with entrepreneur and social-media mogul Kim Kardashian and members of her family to create content for Hulu.

Ms. Kardashian, considered one of the most influential reality-television stars and a social-media-influencer pioneer with her 254 million followers on Instagram, was also the voice for a character in Paramount Pictures’ animated “Paw Patrol” film, released earlier this year.

Brent Montgomery, chief executive of content-production studio Wheelhouse Entertainment, says not only are young stars circumventing the traditional system of gatekeepers ruled by television and movie executives, but the pace at which they build outsize followings is accelerating.

“Kim Kardashian took off faster than a regular person is used to seeing but then her sister Kylie Jenner took off even faster. Fast forward to now, and Charli D’Amelio has taken off even faster,” he said.

Earlier this year, Mr. Montgomery sold a reality show, called “The Hype House,” to Netflix about a group of influencers living under the same roof. The reality series, set to debut later this year, features digital influencers who, collectively, have nearly 200 million social-media followers.

Hollywood has taken notice that younger generations are spending less time consuming movies and television. A recent study by Deloitte said that Gen Zers—defined as ages 14 to 24—prefer playing videogames, listening to music, browsing the internet and scrolling through social media in their leisure time over watching movies and TV at home. Every older generation ranked movies and TV as their top entertainment option.

“Traditional Hollywood is really in a weird spot right now because they’re seeing TikTokers and YouTubers becoming more popular than traditional actors and actresses,” says Reed Duchscher, an agent who represents influencers like Jimmy Donaldson, a 23-year-old YouTube creator known as MrBeast with more than 69 million subscribers. He became famous for stunts, tricks and giving money away.

Rise of The FinFluencer And How They Target Young And Inexperienced Investors

Discovering potential stars on the internet isn’t a new phenomenon. Comedian, actress and rapper Nora Lum, known professionally as Awkwafina, and singer Justin Bieber first attracted attention on YouTube years ago.

As the number of people creating content on platforms such as YouTube and TikTok has surged, there are more opportunities for digital stars to make money online and parlay that success offline, agents and executives say. The online platforms have also evolved their algorithms to more effectively direct viewers toward popular content.

Top influencers can make tens of millions of dollars a year raking in cash through sponsored content, ad-revenue sharing and subscriptions to exclusive content. In the U.S., the number of YouTube channels making at least $100,000 in revenue grew by more than 35% in 2020, YouTube said.

“You used to need the studios to be famous,” says Dan Weinstein, a former United Talent Agency trainee who co-founded Underscore Talent. The company represents independent creators like Dubai-based YouTubers Vlad and Niki, school-age brothers that have nearly 72 million subscribers on the platform.

Backed by elaborate sound effects, the brothers sometimes interact with their family, play, do crafts or have celebrations.

Initially studios proceeded cautiously, choosing to work with influencers on a limited basis, according to talent agents. Executives either contracted influencers to market films and TV series to their followers or cast them to play minor roles in movies and television.

Captivating audiences in the real world hasn’t been easy for some online talents. After two seasons, NBC this year canceled Canadian comedian and YouTuber Lilly Singh’s late-night talk show, “A Little Late with Lilly Singh.” After the announcement, Ms. Singh said that she signed a deal to produce television for an arm of NBCUniversal and was developing a comedy project with Netflix.

Meanwhile, veteran celebrities like Reese Witherspoon, Ryan Reynolds and Will Smith are increasingly following the playbook created by online talents to foster relationships with fans and create more value for themselves or companies they invest in.

“Digital creators have really sketched the map for what it means to be able to go directly to consumers, directly to your audience,” says Ali Berman, who as head of UTA’s digital talent division represents Ms. D’Amelio.

Dwayne Johnson —also known as The Rock—has spent more than 20 years in wrestling, television and film, but he initially struggled to attract viewers on YouTube. Mr. Johnson hired a team of digital-content producers who suggested making a video with top YouTubers, which helped the actor’s channel take off.

Now, Mr. Johnson promotes his movies and endeavors, like his tequila brand, via both his YouTube channel and Instagram account, which have 5.7 million and 269 million followers, respectively.

“Even if he has a bad movie, it doesn’t matter because of the relationship he has with his fans,” said Mo Darwiche, one of the producers who worked on promoting Mr. Johnson’s YouTube channel.

Rise of The FinFluencer And How They Target Young And Inexperienced Investors

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