Are you an informed investor?
Financial Advice via Social Media – the Rise of the “Finfluencer”
Social media is a key source of financial information—especially for younger Millennials and Gen-Z. Short‑form videos, livestreaming, online forums, and algorithmic‑driven social feeds are accelerating the reach of financial content, leading to the rise of the financial influencer or “finfluencer.”
Finfluencer-driven content ranges from basic financial education to high‑risk investment strategies, like options and margin trading or investing in crypto assets. While some finfluencers aim to educate and inform, others are paid promoters or unqualified individuals presenting opinions as expertise.
This investor advisory explains what financial influencers are, how they are compensated, what you should keep in mind when you are exposed to financial influencers’ content, red flags to watch out for, and resources available to you.
What is a Financial Influencer (“Finfluencer”)?
A finfluencer is a person who creates social media content that offers advice on finance, managing money or investing. Finfluencers leverage their popular or cultural appeal to influence others with posts, videos and other social media content often stylized to be entertaining so that the post or video will be shared. The financial influencer may be compensated by the business offering the product or service, the platform on which the message appears, or an undisclosed financier.
In the United States, federal law requires that anyone who gets paid by an issuer to promote that issuer’s securities must disclose this fact. In Canada, the Canadian Securities Administrators and Canadian Investment Regulatory Organization issued guidance on how securities laws may apply to the activities of social media financial influencers (finfluencers) and to registrants and issuers who work with them.
Purposefully manipulating the market for a security also is a type of fraud. And anyone in the business of advising others on their investments for a fee must register as an investment adviser.
Finfluencers may test the boundaries of these and other legal standards, arguing their conduct falls outside of what is prohibited or that their conduct is otherwise exempt from regulation as protected free speech. While there is nothing new about marketers paying celebrities to endorse their products, what is different is that such breezy and hyper-emotional endorsements are being made in what is otherwise a very regulated industry with stringent rules about performance claims and disclosure of potential conflicts of interest.
Example: Fiona Finfluencer enters into agreements with several companies to promote via her social media accounts the company’s products and services for cryptocurrency trading accounts, real estate investing, and a start-up company that grows loofahs.
The cryptocurrency trading platform pays Fiona $25 per person that she pushes to its platform. The real estate investment company compensates Fiona a flat monthly fee plus a bonus depending on how many people participate in their investments based on Fiona’s recommendations. The loofah company compensates Fiona with a monthly flat fee, equity in the company, and free use of its products. Fiona discloses none of this to her social media followers.
What Should You Consider When You Come Across Financial Advice on Social Media?
- Finfluencers should disclose compensation they receive. Government laws protect consumers by requiring that advertisements – including product endorsements by social media influencers – must be truthful. But regulators cannot police every advertisement or endorsement. Consumers thus should not assume that a finfluencer is disclosing everything that they ought to be disclosing.
- Entertainment for the masses, not individual advice. While brokerage firms, banks, and investment advisers work with individual clients, finfluencers try to reach as large a following as possible to achieve a high volume of views. While some finfluencers may work in the financial services industry, many more do not. Finfluencers should (but may not) remind their followers that their social media content is not a replacement for individualized financial advice.
- Limited direct recourse. Finfluencers are not generally required to submit to governmental regulation. As discussed above, some laws and regulations apply to help protect consumers, but investors likely will have limited ability to recover from a finfluencer who turns out to be a fraudster or a simple know-nothing pretending to be a highly-skilled professional.
- Misleading information. Finfluencers, like companies, should not overstate the prospects of a business or omitting crucial information that could influence investment decisions. Furthermore, making unrealistic – or false – promises about an investment opportunity is also stepping over the line.
Watch out for Red Flags
Dubious Advice. While some financial content may include helpful advice like the basics of financial literacy, other content might include reckless advice (e.g., “Avoid Paying Your Debts” or “Make Your Next Mortgage Payment Using this HACK!”) that could result in serious financial consequences, including a lowered credit score, losing significant amounts of hard-earned money, or civil or criminal actions being brought against you. Like other sketchy investment opportunities, if it sounds too good to be true, it probably is.
Credentials Check. If the finfluencer claims to hold a financial certification or designation of any kind, check to see if the certification or designation comes from an accredited organization and whether the finfluencer is currently in good standing. You can also check with your securities regulator to see if the person is registered to provide investment advice and recommendations. If not, report them.
Show Me the Data. Some finfluencers build their following by promising “to the moon” stock picks or investment strategies on a regular basis. While some of these recommendations may increase in value, many more may lose value or go bust. Take these recommendations with a shaker full of salt and ask for the data to back up the claims the finfluencer is making. If they only promote their “amazing” results, they are likely too good to be true. Remember: Finfluencers make content for their financial gain. Ask yourself: If the finfluencer’s strategies and picks worked out so well, why is the finfluencer spending hours making social media content?
Presentation of a Lavish Lifestyle. Finfluencers may wear expensive clothes, drive nice cars, and shoot their videos from exotic locations to project wealth and success. All these things can be rented, leased, or borrowed for the video production shoot, just like a film or television show. Just because someone is projecting wealth doesn’t mean they are earning large amounts of money from the investments or strategies they are promoting. In fact, the money they are earning may be coming from ads or brand sponsorships – the content may just be a way of elevating the finfluencer’s brand and social media reach.
Where to Go for Help
If you have concerns about a finfluencer, you should act. You can contact the social media platform through which the finfluencer is spreading their message to make the platform aware of your concerns. In addition, you can file a complaint with your securities regulator.
The Bottom Line
While celebrities and other well-known personalities may be very good at what they do in their respective professions, that does not necessarily mean they should be trusted for investment advice. Investing is an individualized endeavor where success looks different for everyone. Endorsements about financial products should be treated with skepticism and subjected to the same scrutiny and consideration given to making any other major business decision. Ask yourself: “Why is this person endorsing this investment and how does it fit in my financial picture?” It may turn out that they are simply being paid to sell it, and that they do not care if it suits your needs or not.
For more tips and information about how to be a better-informed investor, contact your state or provincial securities regulator. Contact information is available here on the NASAA website.
Posted: October 2026
NASAA has provided this information as a service to investors. It is neither a legal interpretation nor an indication of a policy position by NASAA or any of its members, the state and provincial securities regulators. If you have questions concerning the meaning or application of a particular state law or rule or regulation, or a NASAA model rule, statement of policy or other materials, please consult with an attorney who specializes in securities law.
