‘Learn faster than the rate of change:’ How influencers are changing accounting and finance

Accounting

The recipe for the Farhat Accounting Lecture YouTube channel is simple: A PowerPoint deck, a professional voice, and some red notes highlighting the most complicated concepts. The videos cover a broad range of topics from auditing and income taxes to nonprofit accounting, but what the channel is most famous for are the prep videos for the notoriously challenging CPA exam. 

Mansour Farhat, 45, doesn’t believe the exam is difficult, but that students are not prepared enough by exam prep providers, saying that these companies often assume that their students have just graduated from college and that their degree gave them the necessary tools. Farhat argues that the quality gap between colleges grew wider these last few decades, and that some students never got a proper education, while others forgot the basics and failed the exam, especially in a post-pandemic setting. This year, only 50% of students passed on the first try, and the numbers plummeted to 20% for all four sections at once.

As a result, like many other “finfluencers,” Farhat has turned to social media to reshape the way people communicate about financial topics, and his channel now counts more than 160,000 followers. There is little room for wondering why this content is popular among U.S. millennials and Gen Zs: With an inflation rate at its highest in 40 years, their financial future has certainly known brighter days. In 2021, the price for a median family home increased by 17%, while more than 72% of millennials and 59% of Gen Zs were pessimistic about achieving financial security by retirement. 

Consequently, these generations demonstrated an increased interest in savings, debt management, personal finances and all sorts of financial and economic topics, as demonstrated by the Deloitte Global 2022 Gen Z and Millennials Survey. The poll shows that cost of living is the main concern for both generations, with unemployment following not far behind. However, millennials and Gen Zs still exhibited a lack of trust in financial institutions and turned toward digital assets such as cryptocurrency or stocks, which are free from the central banks’ control.

That’s where social media comes in: To educate themselves in finance and investing, 45% Gen Zs use YouTube and 30% use Tik Tok, while 47% of millennials tend to turn towards internet searches or YouTube, at 40%. Despite these trends, financial institutions seem behind on new technologies, and a 2022 Verbatim research found that only 8% of accounting firms offered a live chat on their website. The report also found that three-quarters of those surveyed either didn’t have or didn’t promote a Twitter, Facebook or Linkedin presence.

At the same time, well-established accounting figures such as Tom Hood or Ron Baker have caught on to the changing dynamics within the financial world, and share their experience of growing an internet audience. With videos, podcasts, blogs, polls, webinars and more, the new “Finfluencers” use these new tools to broaden people’s understanding of the industry with humor, insight and ambition. 

Sharing knowledge: Mansour Farhat

Farhat argues that the CPA exam is not a good predictor of success in the field, because a lot of the required material will never serve students again. While the professor recognizes the necessity of the exam, he says it lacks an appreciation for the technical skills or the entrepreneurial spirit needed to be a good accountant. 

“People who don’t pass were not given enough time to succeed, and that’s when I come in,” said Fahrat. “My product is not for someone who graduated from Columbia or Harvard, but for those who need to start from the beginning and learn to love the field.” 

While it was never Farhat’s intention to become an influencer, he now works seven days a week to maintain his online presence and is very attentive to engagement rates, which evaluate what keeps people’s attention. Still teaching college courses on the side, Farhat tweets out a motivational quote on Twitter every morning and posts one or two lessons a day. To keep his students engaged, Fahra applies accounting principles to real-life examples, such as fraud cases or mergers, and uses them to explain how people get around the rules. 

The former CPA puts a particular emphasis on YouTube and Instagram because of their popularity among millennials and Gen Z, which he believes is due to their scalability and wide socio-demographic reach. Fahrat thinks that the future of teaching resides online, because students are looking for flexibility and want to take charge of their own education. Coming from all around the world, subscribers leave their questions in the comments section and Farhat makes a point to always be responsive.

“When you are teaching online, you can’t leave any stone unturned and you need to think about every question,” he said. “It makes you a better teacher because you need to create and listen at the same time, and I can understand their concerns if I put myself in their shoes.”

When he was in community college for his master’s degree, Fahrat taught night classes in financial accounting and worked at a local CPA firm during the day. Eager to spread his knowledge, Fahrat soon started recording his voice over PowerPoint decks and moved all of his videos onto YouTube. After a few years, the channel gathered a wide range of followers, among them a lot of CPA candidates who were using the channel as a supplement to prepare for the exam. 

Responding to this growing need, Fahrat later created a website dedicated to exam preparation. For a small fee, subscribers can access over 60,000 true/false and multichoice questions, and thousands of accounting, tax and auditing lectures. 

“I feel responsible for others,” said Farhat. “For me, YouTube is no longer a job but a mission, which makes it very stressful and demanding. But it is also very rewarding because the feeling of helping others is undescribable. Eventually, my goal is to be in every college helping students and become their No. 1 info source.”

Social media influencer concept art

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Challenging the industry: Ron Baker

“People have always been attracted by garbage, and there is loads of it on television and social media. There’s a strategy even in crap, to redirect people’s attention and gain a community,” according to Ron Baker. “I just hope that they will be able to form their own judgment and stop following random videos on TikTok, eventually.”

Baker, 60, has seen the financial world transform since he worked as a CPA at Big Four firm KPMG more than 20 years ago. A passionate writer, public speaker and “radio junkie,” Baker was contacted by VoiceAmerica.com in 2014 to create a radio show, and since then, every Friday at noon, Baker invites prominent authors or economists to discuss the accounting profession and the rest of the financial world. 

Not a great believer in social media or Twitter’s “bathroom wall,” Baker exercises his influence on the radio, which he thinks is a theater of the mind and the most intimate form of expression. Contrary to videos that may be forgotten once the viewer scrolls down, Baker argues that the audience needs to stay engaged to follow a podcast, and they get to know their host like an old friend. The author of seven books, Baker hints that his upcoming work, “Time’s Up,” may shake up the profession once again. 

“What I realized is that I am trading knowledge, and that I want people to think with me,” said Baker. “When I give my knowledge away, I need to refresh it and replenish it, and that’s how I don’t get chained to legacy thinking, because I am ready to unlearn and pivot to a new arena of ideas.”

Among the many topics he has explored in his show, Baker has denounced the fact that auditors are often paid by the companies they audit. He says that the accounting press is not educated enough on the topic, and that agencies such as the American Enterprise Institute have been promoting reforms for years. In “The End of Accounting and the Path Forward for Investors and Managers,” author Baruch Lev said that audits influenced only 5% of investors’ decisions, which could say a lot about a need for change. 

One of Baker’s lifelong goals has also been to change the billable hour system that most public accounting firms still use today. The radio host argues that the current model, which charges a client for the amount of time spent on a project, forces customers to pay for a product they don’t know. Baker says that it also worsens the current mental health crisis within the profession, as accountants must record everything they do and are pushed towards productivity rather than quality.

“Medical practitioners often have 50-60 clients a day and it’s eerie, because it’s so close to the CPA profession,” said Baker. “It’s impossible to build a relationship in a 10-minute tax interview, whereas if you limit yourself to 600 patients with a subscription system, it’s no longer a fee-for-services model.”

Firms sometimes try to disguise their billing policies as a subscription by giving a fixed price and dividing it by 12, without adding value to the product. Others argue that this model would only benefit the wealthiest clients or would not be profitable in the long-term, but Indiana CPA Jody Grunden is a great example of success, according to Baker. He was one of the first to introduce a subscription-based billing method and grew his $600,000 firm into a $11 million company, for a diverse pool of customers that pays a weekly fee.

It was to promote this kind of thinking that Baker created the VeraSage Institute with two former partners in 2001, and their efforts paid off: According to Baker, the number of firms using the new value pricing model rose from 5% to 35% since 1994, and while it may be a victory for accountants and their customers, Baker says that innovation always takes society by surprise. Expanding his area of influence is his way to prepare for future changes. 

Promoting critical thinking: Robert Ross

In early August of this year, Singapore-based crypto trading platform Vauld saw its $46 million worth assets frozen by India’s anti-money-laundering agency for facilitating “crime-derived” proceeds from predatory lending firms. The company had become popular around October 2021 for its fixed deposits with a 12.68% interest rate, in large part because many popular “finfluencers” promoted the product on social media. 

The case prompted debates about the credibility of online personalities, and many experts recommended caution when seeking financial advice on the internet. More than half of people who reported losses to investment scams in 2021 said the scam started on social media, and in the U.S., retail investors lose about $770 million annually from fraud initiated on social media platforms. This is why Robert Ross, 34, says that subscribers should Google someone’s name before giving them too much credit. 

“There used to be a trend on TikTok telling people to use leverage or margins and I had to make videos telling them not to, because Amazon was falling 40%,” said Ross. “People need to be very skeptical about information that they get on social media, even from professionals. We get things wrong, and predicting the future is very difficult.” 

The Los Angeles-based author of “A Beginner’s Guide to High-Risk, High-Reward Investing” has a few shows in development and has attracted more than 380,000 followers on TikTok, where he is known as the “Tik Stocks Guy.” When he is not contributing to Time Magazine or Business Insider, Ross aims to promote sensible investing habits with a hint of humor. He was the first content creator to discuss stocks on the platform, with a focus on risk management. 

Over a million investors now ask Ross’ opinion on investing, economics and personal finance every month, and the creator attributes his success to his flexibility. He says that staying relevant on the internet means conveying actionable and timely analysis to catch the eye of the algorithm and reach as many people as possible. Ross says that some famous TikTok personalities fell from grace because they didn’t adapt to the changing market or real-world expectations, such as inflation.  

“The prospect of making money is always appealing to people but it is not something that I condone, because they should focus on long-term investments,” said Ross. “The way you really make money in the stock market is to hold stocks for many years, not to blindly follow sexy trades like Wall Street bets. People forget that you never hear about those who lose a lot of money.”

Ross has been writing professionally since he left college, but it was in November 2019 that he transformed his free articles into a subscription service, before getting the idea of making videos. He believes that TikTok is the best platform on which to gain a viewership from scratch because good content naturally gets pushed up, but most of his revenues come from his Patreon and from Instagram, where he is very active. 

When it comes to the future of accounting, finance and investing news, Ross believes that social media will come to replace the legacy media. Platforms such as TikTok gained the same kind of branding or content as newspapers, and while social media has much fewer safeguards against misinformation, dismissing their importance is not realistic. Ross doesn’t see it as a good or bad thing, but something that was inevitable with the rise of new technologies. 

“We are the new CNBC or Wall Street Journal, but instead of being owned by one corporation, we are individuals building our own brand,” said Ross. “People are subscribing because they want actionable advice, market lessons and fast interactions. The world is changing, and finance professionals must either follow or become obsolete.”

Growing a community: Tom Hood

The term “influencer” was first added to the dictionary under its current definition in 2019, many years after personalities such as PewDiePie or Lele Pons gained significant notoriety online. Instagram was created in 2010 and YouTube in 2005, and it was during the year of Twitter’s creation, in 2006, that Tom Hood, 52, understood where the future would be. 

At the beginning of his career with the Maryland Association of CPAs, Hood realized that he could encourage young people to become accountants via social media and started blogging about what he observed at the association. After meeting someone from Chartered Accountants Ireland and connecting him to a U.S. college class by webcam — a unique move for the time — Hood observed that virtual connections could significantly increase his reach. 

“All those key thought leaders that I met helped me create my own information supply chain, and if I was on a deserted island with nothing but my iPhone, I could keep up with all the latest trends just by looking at my Twitter and LinkedIn feeds,” said the father of three. “It is a great way for young people who are stressed about money to connect with leaders and get the information they need.”

Hood distributes his online activities in five categories: connecting, collaborating, curating, innovating and influencing, which are all turned toward having a conversation. Hood uses polls to understand what resonates with the 730,000 people who follow him on LinkedIn, and whether good or bad, their reactions help spread his work across the profession — and beyond. He sees influencing as earning trust and keeping it, and not overcommercializing what people most care about. 

Thanks to his online presence, Hood has seen well-known trends emerge from the profession before the media did. He observed companies struggling with talent and skill shortages, while the CFO world was crumbling under the recession. From his exclusive window into people’s lives, Hood saw that the accounting profession would never come back to what it was before the pandemic. Firms had to learn how to adapt to a hybrid world, and how to meet the new demands of employees, who now want purpose and a work-life balance.

“There is a quote that I love from Charles Edward John: ‘You will be the same person in five years as you are today except for the people you meet and the books you read,'” said Hood. “If you apply this concept to social media, it makes me learn from 700,000 people everyday! Getting recognition from the masses is the accomplishment that I am the most proud of, because they care about what I have to say, not about my position.”

Early on, Hood understood that reaching out to other public figures would help spread his message. In 2011, he tagged authors Tom Peters and Emmanuel Gobio on Twitter to discuss the books studied at the AICPA Leadership Academy, and his reach increased by 40,600 people. The creator was quickly noticed by a young LinkedIn, which was building its Top 100 Influencers List, and months later, Hood became one of the leading accounting influencers of the platform.

Now the executive vice president of business engagement and growth for AICPA-CIMA, Hood has been named the second most influential person in the profession by Accounting Today (behind AICPA chief Barry Melancon). 

Accounting is the language of business, and it remains a critical profession for our world’s future,” said Hood. “As the economy emerges and as new technologies start to shape it, CPAs will have to learn faster than their competition, faster than automation,  and faster than the rate of change.”

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