WASHINGTON, D.C. – (August 9, 2022) – The North American Securities Administrators Association (NASAA) today issued an Informed Investor Advisory recommending investors use caution when considering advice from social media financial influencers, or “finfluencers.”
A finfluencer is a person who, by virtue of their popular or cultural status, has the capability to influence the financial decision-making process of others through promotions or recommendations on social media, according to the NASAA Informed Investor Advisory. They may seek to influence potential investors by publishing posts or videos to their social media accounts, often stylized to be entertaining so that the post or video will be shared with other potential investors.
“Investors should keep in mind that finfluencers are not subject to the same regulations as licensed financial professionals and may have undisclosed conflicts of interest,” said NASAA President Melanie Senter Lubin. “Before you consider investing or acting on advice from a social media personality, make sure you understand all the ins and outs of the investment including all potential risks.”
The advisory includes information to help investors better understand how influencers operate, what to consider when coming across financial advice on social media, and where to go for help with concerns about a possible finfluencer. The advisory also points out red flags to consider including dubious advice, unverifiable or outdated financial credentials, or investment recommendations not backed up by accurate data.
“The bottom line is that before making any financial decisions about your money, ask questions and make sure you understand the risks, and before you invest check on the registration status of the person and the investment with your jurisdiction’s securities regulator,” Lubin said.
The finfluencer advisory as well as contact information for state and provincial securities regulators is available on the NASAA website at nasaa.org.
Organized in 1919, the North American Securities Administrators Association (NASAA) is the oldest international organization devoted to investor protection. NASAA is a voluntary association whose membership consists of the securities regulators in the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, the 13 provincial and territorial securities regulators in Canada, and the securities regulator in México. For more information, visit www.nasaa.org.
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Jeanne Hamrick | Director of Communications
Karen Grajales | Communications & Investor Outreach Manager