The hustle of scrolling through social media in search of the golden nugget of financial wisdom might just leave investors with pyrite—fool's gold—as the Ohio Department of Commerce Division of Securities issues a stark warning against taking investment advice from influencers, aptly dubbed "finfluencers." With a growing demographic of young people, especially those in the enigmatic Generation Z, turning to platforms like Instagram, X, and TikTok for their financial enlightenment, the concern is that these online personalities may not have the credentials or the audience’s best interests in mind, according to the Ohio Department of Commerce.
The danger lies not just in the unverified status of these social media figures but in their potential to mislead for profit and to propagate fleeting trends over solid financial strategies, and it must be noted, Bankrate reported a staggering 30% of American adults sought financial advice from social media in 2023, with a significant slice of that pie coming from the post-millennial cohort, relying on platforms that are designed to entertain as much as they are, perhaps mistakenly, trusted to inform. Meanwhile, a troubling 27% have been duped by false or misleading financial counsel on these very platforms, a 2024 report from Edelman Financial Engines revealed.
While friends, family, and licensed financial advisors are the traditional go-to sources for such advice, Ohio Securities Commissioner Andrea Seidt , "The best place to get help achieving those goals is at a licensed investment firm with a professional who understands your financial situation," stressing the perils of unverified finfluencers, who she describes as, "wannabe advisors who are paid to sell products online and are not trained or capable of offering solutions tailored to you," according to the Ohio Department of Commerce. Seidt implores that personal due diligence is paramount when forging one's financial path, absent regular counsel with a personal financial advisor.
To combat the misinformation and potential deception by finfluencers, the Ohio Division of Securities advocates for several steps to ensure that Ohioans' investments are sound and secured: conducting thorough checks on financial professionals using tools like FINRA’s BrokerCheck, cross-referencing advice with reliable sources, and being wary of dubious promises of high returns with inconsequential risk, pressure-laden pitches, and the inexplicable allure of celebrity endorsements. Investor.gov is emphasized as a cornerstone of unbiased, informative resources, a compass for those navigating the tumultuous seas of investment options. Ohio residents in need of support, or those suspecting they've fallen prey to a scam, are invited to consult the Division's Investor Protection Hotline at 877-683-7841, an entity that bears the torch of guidance in an oft-darkened financial realm.
