Getting financial advice on social media can be tricky. How to do


Young investors flock to social media platforms like TikTok, Instagram, and Reddit for financial advice.

In fact, a third of Americans trust social media to help them make financial decisions, and 32% trust social media influencers and celebrity financial advice, according to a survey by investment firm TIAA.

Navigating the multitude of recommendations can be tricky.

“The key is to remember that bad advice costs a lot more than good advice,” said Winnie Sun, co-founder and CEO of Sun Group Wealth Partners, based in Irvine, Calif.

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While you can perform background checks on investment and finance professionals through regulators, it’s more difficult to know the motivation of someone telling you to buy stocks allegedly in. rising and coming.

“On social media, anyone can participate, no matter who they are, where they are from, what their experiences are,” said Sun, a member of the CNBC Financial Advisor Council.

If you get financial advice, especially on investing, through social media, here’s what to do.

Find finance professionals

To check the background of a certified financial planner, go to the CFP Board website. For other professional designations, see the FINRA page which lists them, as well as links to the designating bodies. This can lead you to a way to verify an individual.

Be careful with investment advice

Sun is among those who have embraced social media. She broadcasts live daily on multiple platforms, including LinkedIn, Facebook and Twitter.

While providing financial advice, Sun does not recommend specific investments. These should be personalized for the individual, she said.

“If you put your investment advice together on social media, there’s a good chance that person isn’t regulated, not licensed,” Sun said.

“It might just be someone with an opinion, but you have to take that with a grain of salt.”

On social networks, anyone can intervene, no matter who they are, what their origins are, what their experiences are.

Winnie Sun

Co-founder of Sun Group Wealth Partners

And just because an influencer has over 500,000 followers doesn’t mean they have the training or references to give financial advice.

“A lot of influencers use their personal experiences and stories to base their advice, but that doesn’t mean their situation is exactly the same as their followers,” said Caishalynne Echols, Certified Financial Planner at Gen. Y Planning.

“Trained financial professionals have studied tax law, retirement planning, etc., and are equipped to guide people through a million different scenarios.”

Do your research

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There is nothing wrong with getting excited about an investment or financial advice that you hear about on social media. The key is to supplement it with your own research.

“You should consult established, trusted and trusted resources before making any financial decisions,” said John Elton, senior vice president and chief information officer of TIAA Bank.

It is also helpful to consult a financial professional about your ideas. If you don’t have one and want a personalized approach to your investment, it still wouldn’t hurt to have a free consultation with a for a second opinion, Sun added.

DIY with your play money

If you decide to start investing on your own after getting advice on social media and then doing your research, do it with the money you’re willing to lose, Sun said.

“Separate your serious investment from your fictitious money,” she said. “Your serious money is the money you really want to be there for you for those important goals that you have.”

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