Less informative strategic advice can produce more informative prices. We study an informed adviser who both trades on his own account and receives compensation linked to the post-report price. Holding private information fixed, we show how promotion can restrain manipulation motivated by trading profits. At sufficiently high reputation, raising compensation enough to eliminate false bad news used to buy cheaply improves market price informativeness in every equilibrium, even though the strategic adviser’s report becomes uninformative. Under further sufficient conditions, always-favourable strategic reporting yields the most informative current prices among equilibria at every interior reputation. We also derive analytical sufficient conditions under which higher reputation lowers the adviser’s expected payoff and worsens prices within the same equilibrium. Financial influencers motivate the joint incentives: a reward for higher prices can counteract the incentive to depress prices before buying, while greater credibility need not benefit its holder.

Using unique account-level data from a leading Chinese fintech platform, we investigate how financial influencers, the key information intermediaries in social finance, attract followers through a process of social transmission bias. We document a robust performance-following pattern wherein retail investors overextrapolate influencers’ past returns rather than rational learning in the social network from their past performance. The transmission bias is amplified by two mechanisms: (1) influencers’ active social engagement and (2) their index fund-heavy portfolios. Evidence further reveals influencers’self-enhancing reporting through selective performance disclosure. Crucially, the dynamics ultimately increase risk exposure and impair returns for follower investors.