Ohio officials warn against taking investment advice from social media
COLUMBUS, OH- The Ohio Department of Commerce is warning investors to think twice before taking financial advice from social media influencers. Officials say so called “finfluencers” are becoming a go to source for younger generations, but not all of them have the right credentials to give proper investment guidance.
According to a recent Bankrate survey, 30% of American adults turned to social media for financial advice last year. Most of them were members of Generation Z.
State regulators say many influencers are not registered investment professionals, meaning they could be promoting risky investments or being paid to advertise investments without letting people know.
“Influencers on social media are incentivized to get your attention, they are incentivized to get you to watch a video, often times a very short video, which does not have enough time to explain the nuances, the intricacies of investment, again once you sign away your investment it’s very difficult to get back, so it’s really important that you do your homework before you transfer your funds,” said John Crist, Director of Compliance, Ohio Department of Commerce, Division of Securities.
The Division of Securities urges investors to verify credentials using tools like FINRA’s BrokerCheck or the SEC’s search tool on Investor.gov. Officials also recommend checking multiple sources before investing and being cautious of anyone promising guaranteed returns or quick profits.
“Investing is an emotional decision, and it’s important to make sure that you’re calming yourself down, and that you’re not just responding to the fear of missing out, that you’re not acting according to the pressure to invest in something that you don’t understand, what we always say is call somebody, explain it to them, if you can’t explain it maybe it’s a sign that you need to do a little more homework,” said Crist.
The Department encourages Ohioans who suspect a scam or need help verifying an investment to call the Division’s Investor Protection Hotline at 877-683-7841 or visit the agency’s website for free educational resources.
