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Every day, our addiction to social media grows stronger. It's straightforward to see how our lives have all gone to social networks, where we congregate, study, shop, and transact.
This is a natural result of life's rapid pace, ongoing development, and the introduction of new technology.
What happens when popular videos and memes start to displace experienced investors as the go-to sources of financial guidance?
Retail or non-professional investors have turned to digital channels, including social media sites TikTok or Instagram, to learn about investing.
Thanks to quick, amusing videos on social media that employ inventive methods to communicate financial concepts, like memes and metaphors, learning about financial matters has become more intriguing and approachable for novice retail and lay investors.
Although many people now have easier access to financial literacy and guidance thanks to this trend, the advice can occasionally be superficial, inconsistent, and vulnerable to fraud and false information.
Investor safeguards regarding financial advice from social media influencers are just beginning to emerge, given the novelty of this new trend.
If left unattended, this could have long-term effects on many individuals in the capital markets sector.
Most of you are aware that I was born in Europe—specifically in the heart of Europe. My birthplace is Croatia, which I visit every year.
As I have many friends not only in Croatia but throughout Europe, we often discuss topics such as world espionage, interrogations, and, most importantly, the world of scammers, fraudsters, and wealthy fininfluencers on social media.
It was during these discussions that the name Finfluenser Immo Tommy emerged. I learned about Immo Tommy while I was in Berlin.
But let's go in order...
The son of a single Croatian guest worker, Immo Tommy, also known as Tomislav (Tommy) Primorac, grew up in Stuttgart.
In his youth, the skilled retailer staged a variety of events, including concerts, themed, and imaginative parties.
Currently, Tomislav (Tommy) identifies as a family man, influencer, businessman, and real estate investor.
Tommy's first apartment purchase a few years ago ignited his passion for real estate. Since then, he has consistently invested in real estate as a (then) traditional employee, amassing a fortune of several million euros.
He started the "Our Stuttgart" Facebook page in 2014 to showcase the best that his hometown has to offer. After the website quickly attracted 100,000 members, Primorac started using it regularly.
The incessant name changes and issues with business partners prompted him to launch his own platform, Citivoo, in 2016.
Primorac began making real estate investments in 2016. Primorac started the immo.tommi TikTok channel and the corresponding Instagram account in 2020.
Primorac uses the username immo tommi on YouTube.
She offers guidance on general financial topics and the purchase of rental homes on her social media networks.
Tommy conducts interviews with himself in several of his videos, a detail that is quite intriguing.
Since November 2020, he has been entertainingly imparting his insightful real estate expertise on social media.
Three years later, he is reaching millions of people via various media and has already assisted thousands in acquiring real estate.
He listened to his followers' desires and developed a network of like-minded individuals along with practical, step-by-step mentorship through ImmoMentoring.
Immo Tommi had 1.1 million TikTok and 877,000 Instagram followers in August 2024.
According to his own information, he employs 17 agents. They handled 163 apartment transactions, totaling 300 million euros in 2022.
Primorac received half of the 16.7 million euros in commission as a result.
Primorac is an independent business owner; hence, it is impossible to confirm his information.
Primorac also works as a real estate specialist for a number of websites and media outlets, including Handelsblatt, ZDF, and virtschaft.tv.
However, there are now grave accusations levelled against this influencer in Germany.
Investigative reports by the German media Spiegel claim that Primorac and his network of salespeople arranged real estate deals that ultimately proved to be extremely risky investments for apartment purchasers.
Research has documented cases where clients have overpaid by as much as fifty percent.
The buildings were allegedly overpriced and in bad condition when they were sold.
They are accused of marketing worthless real estate, and on top of that, their financing arrangements are allegedly highly disadvantageous for purchasers.
Contracts do not specify repayment, so the only payment is interest. The principal amount is not lowered.
Public sales contracts assert that the influential Primorc received significant commissions.
According to some affected parties, they primarily relied on the reputation of "Immo Tommy" when brokering real estate.
The influencer, who describes himself as "the biggest real estate influencer in Europe," uses the phrase "Learn how to buy property, rent it, and get rich."
In addition to about 900,000 Instagram followers, he has over a million TikTok followers.
However, Immo Tommi is not alone on social media.
The "financial influencer" or "influencer" scene is growing in significance, particularly for younger generations.
Financial influencers can affect young people's investment decisions in addition to being a source of information.
Numerous individuals found Finfluencer's proposition even more alluring during the pandemic and the ensuing inflation.
They make lofty promises of prosperity, financial freedom, and advancement, but the background is often initially unclear.
How do you spot questionable influencers?
You must understand that financiers and bloggers always have their own financial interests.
As a result, when searching for financial information on social media, you should proceed with caution.
Reputable financial influencers would not provide any precise investment advice.
Consumers should be aware if an influencer wishes to switch to a private chat service such as WhatsApp or Messenger. This is a significant concern that is usually not taken seriously.
Check out the business model.
Undoubtedly, influencer content can be truly captivating.
However, they always stand apart from the portal's recommendations. When it comes to influencers, we must constantly understand how the influencer business model operates.
I believe this is one of the more essential questions.
Indeed, many influencers' business strategies are not immediately apparent.
Some promote financial items, while others sell expensive courses or, like "Immo Tommy,” broker real estate transactions.
A network typically forms around prominent persons, combining several business methods.
In the case of Immo Tommi, it's comparable to an advertisement found in a newspaper or on the Internet.
However, you should think carefully about the investment rather than blindly trusting it.
In practice, things don't always look like that. Some Immo Tommy real estate buyers have never seen real estate in person.
This story reveals a lot about Immo Tommy and his business operations, as well as the dangers of blindly trusting influencers.
"I couldn't control many things anymore."
Imo Tomi, an influencer, reacted to German media allegations. In a video statement, he admits to his mistakes and announces his separation from several business partners.
Primorac stated that mistakes and problems occurred as a result of collaboration with several companies.
Primorac released a video on YouTube, Instagram, and TikTok revealing that some of these partners split up a few months ago.
The influencer also claims that he and his family have received death threats because of the report.
Primorac thinks he can accept constructive criticism.
His firm has grown dramatically in recent years. "I couldn't control many things anymore." He now wishes to return to health.
He has sold over 500 properties in the last four years, but "something goes wrong on one side or the other."
There are "tonnes of happy customers" there, he said.
However, purchasing real estate entails some personal responsibility. "They can't blame me for everything,” said Primorac.
For instance, according to the notarized sales contract, Primorac received 49,000 euros of the 166,000 euros sold for the property.
According to a lawyer's testimony in court, Primorac received 90,000 euros as a "sales commission" for the second house, whose purchase price was roughly 550,000 euros.
Customers say they weren't told the fees' purpose, and the contracts weren't clear.
Primorac left all of this out of his statement.
What can all of this teach us?
One reason that financial advice on social media is easier to access is the increase in influence.
The financial advice industry is evolving. The popularity of "finfluencers," or influencers who post financial advice on social media, can eclipse that of traditional advice media.
According to FINRA research, 57% of US investors under 35 rely on financial experts as their source of investment advice, while over 60% turn to social media.
In order to further connect individuals whose interest has been aroused by social media with more potent financial advisory tools, financial institutions are starting to establish paths from social media to their products and services.
Social media creates powerful networks that reflect a wide range of regional, ethnic, cultural, and special interest backgrounds while also making financial advice inclusive and accessible.
These internet forums may be the only places where a large number of people can discuss these crucial personal finance issues together.
Certain fin-influencers showcase the "real" side of personal finance through relatability and honesty.
Institutions have the opportunity to engage with a wider range of investors and draw inspiration from thriving emerging markets to enhance their credibility and meet the growing demand.
Younger generations frequently use social media as one of their initial stops when looking into where or how to invest.
However, private and opaque algorithms have a significant influence on the platform's content; thus, posts that are engaging may take precedence over those that are not as good.
Influencers pose two primary risks:
The qualifications of influencers range greatly, from self-taught to officially accredited, making it challenging for a new investor to determine the quality of their advice.
Fininfluencers have the potential to earn six figures or more annually from their brand or advertising partnerships. This creates invisible or hard-to-distinguish conflicts of interest between producers and their viewers.
Exciting advances in the capital markets industry include the advent of influencers, innovations in social media content delivery, and easier access to interesting content.
Traditional financial advisors and institutions, however, continue to play a significant and vital role in giving individuals access to risk management, education, and comprehensive, individualised advice in order to facilitate successful investment outcomes.
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