Finfluencers, Celebrities, Social Media: Should You Listen To Them?

Finfluencer

By Lori Schock, Director of the SEC’s Office of Investor Education and Advocacy

Have you ever noticed that everyone always has an opinion about everything? Whether it’s where you can get the best burger in town, the TV show you’ve got to stream, or where to find an amazing deal on a new car, someone is always trying to give you advice. The same can be true when it comes to getting information about investing. Everyone thinks they have the best strategy to build wealth.

More and more investors like to engage on social media platforms and in discussion forums to seek out ideas and opinions about investment opportunities. Many turn to “finfluencers” (financial influencers) who provide information about financial investments. And still others look to famous personalities and celebrities who may be getting paid to endorse certain types of investment opportunities.

While I can’t provide investment advice, I can tell you that making investment decisions based solely on information from finfluencers, social media, and celebrities may not be a great idea. Here are a few reasons why:

  • They likely don’t know your personal financial situation, or how much risk you’re willing to take when it comes to investing, or even your investing goals.
  • They may be chasing the latest investment trends, which may not be the right investment to help you meet your financial goals.
  • They might be getting paid for their posts and have their own agenda, which doesn’t align with yours.
  • They may be looking for clicks and followers so they can earn more money and may not disclose information that’s important to you.
  • They may not have the knowledge and experience to give you meaningful information that’s appropriate for your needs and may even exaggerate their credentials.
  • It’s also important to understand that although these finfluencers, individuals on social media forums, and celebrities might be popular, they likely are not registered investment professionals.

A great first step toward protecting your hard-earned money is to conduct a background check on anyone you’re planning to use to help you make investment decisions. Our website, Investor.gov has a free search tool that can check their background, registration status, and more.

If you decide to listen to a finfluencer, someone with a large following on a social media platform, or a discussion forum, I encourage you to exercise caution and fact-check everything they tell you to make sure the investment opportunity is legitimate and helps you meet your financial goals.

Whether you’re researching an investment professional or deciding which investments help you meet your financial goals, choose your information sources wisely. At the end of the day, the best strategy to building wealth is to get information from trusted sources and by conducting your own independent research. A good place to start is Investor.gov, which provides free, accurate, unbiased information, and financial planning tools to help you invest wisely and learn how to better protect yourself against investment fraud.

Note: Director’s Take articles are written in a short, non-legalese format intended to provide you with tips and information on timely investment topics that are important to you. You can subscribe to receive Director’s Take articles or find our latest article on the Director’s Take spotlight page.

This article is provided in the author’s official capacity as the Commission’s Director of the Office of Investor Education and Advocacy but does not necessarily reflect the views of the Commission, the Commissioners, or other members of the staff.

 

Featured Content