THE POWER OF FINANCIAL INFLUENCERS: EXAMINING THE MODERATING ROLE OF FINANCIAL LITERACY IN INVESTMENT DECISION-MAKING OF YOUNG ADULTS

The rapid growth of social media has transformed the way young adults obtain financial information, giving rise to financial influencers (finfluencers) as influential sources of investment advice. Despite the growing popularity of finfluencers, limited empirical evidence exists regarding whether financial literacy can reduce or alter the influence of finfluencer recommendations on investment decisions. This study investigates the direct effects of finfluencer recommendations and financial literacy on the investment decisions of young adults while examining the moderating role of financial literacy. Primary data were collected from 250 young adults using a structured questionnaire, and the proposed relationships were examined using hierarchical moderated regression analysis. Finfluencer recommendations were operationalized through three dimensions—credibility, authenticity, and parasocial relationship—while financial literacy was incorporated as both an independent predictor and a moderating variable. Reliability and validity assessments confirmed the robustness of the measurement model, and diagnostic tests indicated that the regression assumptions were satisfactorily met. The findings reveal that finfluencer recommendations exert a significant positive influence on investment decisions, with credibility and authenticity emerging as the strongest determinants of investor behaviour. By contrast, financial literacy demonstrates no significant direct influence on investment decisions and fails to moderate the relationship between finfluencer recommendations and investment behaviour. These findings suggest that persuasive social media communication exerts a stronger influence on young investors than their self-reported financial knowledge, highlighting the dominant role of peripheral persuasive cues in digital financial environments. The findings further provide practical implications for financial educators, regulators, policymakers, and digital platform providers by emphasizing the need to complement financial education with digital media literacy and critical evaluation skills to promote more informed investment decision-making among young adults.