FINRA finds appetite strong for online investing advice

George Cheng of Pillar Point Wealth Management says that some of his most productive financial planning discussions start with a client who wants to follow up on an investment recommendation pushed on YouTube or some other social meda site.

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“When a client comes in and says they watched a 30‑second ‘I’m a millionaire, just own these three ETFs for life’ clip, my job is to turn that into a personalized, long‑term plan,” said Cheng, whose firm is based in San Francisco.

Cheng is among many financial advisors now contending with a seemingly endless supply of financial advice being proffered on sites like YouTube, Reddit, TikTok, Instagram, X (formerly Twitter) and myriad others. A report this month by the Financial Industry Regulatory Authority found that 45% of 2,861 investors polled in an online survey go online for investment recommendations and nearly a quarter specifically consult social media. 

Among the young, the numbers turning to social media were even higher. Thirty-five percent of the respondents under age 30 said they regularly receive financial advice from online sites. For those older than 65, only 13% said the same, according to the FINRA Investor Education Foundation’s 2025 study.

The good, the bad and the need not to be dismissive

FINRA’s study lists not only risks for investors who turn to social media for advice but also likely benefits. On the plus side, it finds that online sites give firms an easy means of disseminating basic financial knowledge to a wide audience, as well as identifying market and other trends before they’ve reached the general public.

On the other hand, FINRA notes usual concerns about social media being used to spread misinformation or even perpetuate outright fraud. As many industry watchdogs have pointed out, FINRA finds that much of the advice on offer is coming from so-called finfluencers with little to no professional training or expertise.

Yet Cheng at Pillar Point Wealth Management said the investing ideas his clients bring him aren’t necessarily all bad. Many times their social media sources are merely calling for the sorts of low-cost, diversified strategies that many advisors recommend.

The trouble is that they aren’t tailored to his particular clients. But no matter how far afield an idea seems, he’s careful never to dismiss it outright.

“Telling a client ‘that’s a terrible idea’ is the fastest way to shut down trust,” Cheng said. “Instead, I ask, ‘What about this appealed to you?’ Often the answer is, ‘It seems simple,’ or ‘They said it’s set‑it‑and‑forget‑it.'”

Others view the advice being dispensed online with a bit more skepticism. Matthew Hofacre, the founder of Pay It Forward Financial Planning in Columbus, Ohio, said many of his young clients will come to him after picking up recommendations on social media to invest in risky options strategies or cryptocurrencies or to try to time the market.

“I blame social media and influencers, because the name of the game is getting clicks, and often what gets clicks is the “hot take,” not the boring investment advice,” Hofacre said. “Where these influencers miss the mark is the overpromising that there’s one magical strategy to make you rich.”

Again, though, Hofacre is careful not to dismiss these recommendations outright. 

“If it’s a new client, I view this as a good opportunity to educate them and show how a strong savings rate in a diversified portfolio can likely provide the returns needed to secure their future,” he said. “If it’s an existing client, I think it offers the opportunity to ask good questions to understand where I failed to receive buy-in from the client.”

FINRA wants your feedback

Some even think watchdog organizations like FINRA, the broker-dealer industry’s self-regulator, should take a bigger role in policing online investing recommendations. Joseph Torre, a financial planner at Colarossi & Williams Financial Advisory Group in Islandia, New York, said he has found that much of the advice dispensed online makes recommendations of risky or unsuitable investments. 

At a minimum, its dispersion to as wide an audience as possible means none of it has been devised after taking into account the needs and goals of particular investors.

“In my view, more regulation is needed as too many unqualified individuals are dispensing financial advice that, if acted upon, can have a potentially disastrous effect on someone’s life,” Torre said.

This isn’t the first time FINRA has noted investors’ propensity to turn to social media for advice. In a report the FINRA Investor Education Foundation released in 2023 with the CFA Institute, which administers the certified financial analyst designation, it found that only 30% of Generation Z investors (between the ages of 18 and 25) were looking to financial planners for investment advice. Their preferred sources, instead, were social media (48%), internet searches and websites (47%), parents and family (45%), and friends (40%), according to a poll of 2,782 respondents.

FINRA wants to hear what advisors think about all this and is giving them until May 13 to submit comments. Meanwhile, the regulatory agency’s study is reminding industry professionals that many existing regulations already govern how financial advice can be dispensed on social media.

Existing industry rules and novel uses for social media

FINRA, for instance, now has rules requiring that advisors’ communications with the public be “fair, balanced and complete” and devoid of misinformation. It also requires firms to have in-house supervisors responsible for monitoring social media posts and keeping records of digital communications.

Looking beyond regulation, FINRA is also asking advisors and firms to bring to its attention any new uses or possible misuses online “finfluencers” have found for social media. According to FINRA’s study, for instance, firms have used artificial intelligence and similar technologies to comb through millions of social media posts to identify changes in market sentiment. At the same time, those insights have been used to devise new investment products.

“For example, S&P Dow Jones Indices launched the S&P 500 Twitter Sentiment Index Series to measure bullish and bearish tweets to both assess individual stocks as well as the broader index,” according to the study.

The influence that sites like Reddit can have on the stock market has been a subject of public concern at least since the “meme stock craze” of 2021. Traders writing on Reddit’s wallstreetbets forum then proved they could work together through online messages to drive shares in companies like GameStop sky high.

FINRA’s study notes that there are now investment products meant to take advantage of “social media-driven investment trends or to provide indices that track popular holdings.” There’s at least one exchange traded fund, or ETF,  that selects stocks after looking for “‘positive insights’ collected from online sources, including social media, news articles, blog posts and other alternative data sets,” for instance.

“The fund indicates that this underlying index uses AI tools, such as natural language processing, to analyze social media posts and other online content to identify stocks that are generating significant positive sentiment among investors,” according to FINRA.