Financial advice on social media

By sharing short videos, infographics, and even memes, finfluencers are making it easier to understand financial topics, such as retirement planning and investing. And they’re using nontraditional channels, including Instagram, YouTube, and TikTok, to reach the next generation of investors. While their social posts can spark curiosity and collective learning, a finfluencer’s advice may not have your best interests in mind. We’ll show you how to validate their credentials and help navigate common finfluencer risks.

Five tips to help you navigate finfluencer risk

Before you take the advice of any finfluencer, you’ll want to understand the risks involved. You can start with these five tips:

1 Verify their credentials

Finfluencers may have millions of followers and thousands of likes on their posts, but that doesn’t necessarily make them credible. You’ll want to check their qualifications, which are usually in their account profile or bio. Some items to look for:

• Formal education in their area of expertise, such as business or finance
• Relevant work experience, like with an investment firm, broker-dealer, or bank
• Security licenses from FINRA, a U.S. regulatory body that qualifies them to sell investment products through various exams
• Certifications, such as Certified Financial Planner (CFP) or Chartered Financial Accountant (CFA), which are globally recognized professional designations

Once you get their credentials, it’s time to do some quick cross-checking. For employment and education, you can look them up on professional sites such as LinkedIn. If someone claims to be a financial professional, you can use BrokerCheck to see if they’re registered with FINRA. You can even get a detailed report, including any past disciplinary actions given to an advisor or investment firm.

2 Read the disclosures

Finfluencers may have their own biases, whether they’re intentional or not. Be sure to read their general disclosure, a paragraph that’s usually posted on their account profile or bio. Here’s how to spot some potential conflicts of interest:

• You see the hashtag #ad, #sponsored, or #partner in the post—which usually means the finfluencer was paid to promote the content you’re seeing.
• You're offered an incentive to visit or buy something on a specific website (called an affiliate)—the finfluencer earns commissions on any sales or click-throughs made by you on the affiliate’s site.
• You see advertisements—companies are willing to pay finfluencers ad revenue to reach their millions of followers, which could influence what content you’re seeing.
• The finfluencer owns the investments they’re talking about—and would financially benefit if you also owned them.

3 Be wary of missing information

A study by the CFA Institute found that only 20% of finfluencers who gave investment recommendations included any form of disclosure.² But reputable finfluencers include them. Use caution if you’re getting investment advice, but you can’t find any disclosures, or they’re hard to understand. 

4 Consider multiple sources

Finfluencers tend to oversimplify complex financial terminology to fit the short format of social media. To get a more comprehensive view, consider multiple sources. Ask a family member, friend, or financial professional for advice. Check your retirement plan, too. Most plan providers have online educational resources and tools available to help you budget, save, and invest for retirement.

5 Use your common sense

In 2024, total losses from fraudulent activity on social media were a staggering $1.9 billion.³ Part of the problem is that financial advice on social media isn’t globally regulated. Use caution if a finfluencer promises you quick wealth or wants your money up front. If it sounds too good to be true, it probably is.

Getting your investment advice from social media 

Common sense, plus a little fact-checking, can help you navigate the new digital world of investment advice. Before you take advice from a finfluencer, verify their credentials, understand the risks involved, and consider how their advice aligns with your long-term financial goals. For a personalized strategy on how to save and invest for retirement, you may want to seek the advice of a licensed financial professional. 

1 "Gen Z and Investing: Social Media, Crypto, FOMO, and Family," FINRA Investor Education Foundation and CFA Institute, May 2023. 2 "The Finfluencer Appeal: Investing in the Age of Social Media," CFA Institute, 1/24/24. 3 "Consumer Sentinel Network Databook 2024," Federal Trade Commission, 2024.