Be cautious of ‘finfluencers,’ Ohio Department of Commerce warns
By Giacomo Luca
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CINCINNATI (WLWT) — The Ohio Department of Commerce is warning individuals to be cautious when trusting social media for investment advice, particularly from influencers who are not registered investment professionals.
More people, especially younger generations, are turning to so-called financial influencers or “finfluencers” for investment ideas, which could put their money in harm’s way, according to experts with the Ohio Department of Commerce Division of Securities.
Nearly a third of Americans have turned to social media for financial advice in recent years, according to Bankrate.com.
One of the biggest risks investors should avoid is following influencer advice from people who aren’t registered investment professionals, said John Crist, director of compliance at the securities division with the Ohio Department of Commerce.
This could be a red flag indicating individuals may be promoting investments for undisclosed pay, chasing short-term trends, or prioritizing clicks over financial well-being.
“What we’re urging is for folks to make sure that they’re exercising a lot of caution to make sure that they’re not giving in to the fear of missing out or making sure that they’re understanding the risks, the ramifications of their investments, and that any sort of advice that they receive that they’re processing through official thought out, registered channels,” Crist said.
To protect your money, the securities division advises investors to verify credentials of financial professionals. Investors can use free search tools like FINRA’s BrokerCheck or the SEC’s tool on Investor.gov.
Investors are urged to seek out multiple reputable sources, do your own research and beware of red flags like high guarantees and a pressure to act quickly.
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