Influence Isn’t Expertise: Ohio Investors Urged to Use Caution When Considering Advice from Influencers

COLUMBUS, Ohio -The Ohio Department of Commerce Division of Securitiesis warning Ohio investors about the risks of turning to social media influencers for financial guidance and investment advice. As more people, particularly younger generations, rely on so-called "finfluencers" to research investment ideas and identify emerging trends to inform financial decisions, they may be putting their hard-earned money in harm's way.

One of the biggest risks that investors should be aware of are influencers who are not registered investment professionals. This is a potential red flag since that individual could be promoting investments for undisclosed compensation, chasing short-term trends, or prioritizing clicks and followers over their audience's financial well-being.

According to Bankrate, nearly one-third of American adults (30%) who looked for financial advice in 2023 turned to social media, with a majority of them being from Generation Z, or those born between 1997 and 2012. Meanwhlie, a 2024 reportfrom Edelman Financial Engines found that one-fourth (27%) of social media users said they had fallen for financial advice or information on social media that turned out to be false or misleading.

While many people still seek financial advicefrom friends and family or licensed financial advisors, Ohio Securities Commissioner Andrea Seidt says individuals who choose to conduct their own research and make their own investment decisions should be mindful of the risksof engaging in an increasingly complex financial environment.

"Investments are a great way to achieve the financial goals that you have set for you and your family, including having a comfortable nest egg for retirement," Seidt said. "The best place to get help achieving those goals is at a licensed investment firm with a professional who understands your financial situation. One of the absolute worst places to get help is from unlicensed finfluencers - wannabe advisors who are paid to sell products online and are not trained or capable of offering solutions tailored to you. If you do not regularly work with a personal financial advisor, it's important that you conduct your own research and ask questions before investing your money anywhere to ensure you are setting yourself up for success."

To help Ohio investors protect their money and investments, the Division recommends taking the following steps:

• Verify Credentials:Use free search tools like FINRA's BrokerCheckor the SEC's search tool on Investor.govto check the background and registration status of any financial professional or influencer.
• Seek Multiple Sources:Cross-reference advice with information from reputable financial publications, government regulators, and licensed professionals.
• Beware of Red Flags:Be skeptical of promises of high or guaranteed returns with little to no risk, pressure to act quickly, and celebrity endorsements.
• Do Your Own Research:Understand any investment product before putting money into it. Unbiased resources, such as Investor.gov, provide free, accurate information and financial planning tools to help you invest wisely.

Ohioans who are considering an investment or suspect they have been scammed can contact the Division of Securities' Investor Protection Hotline at 877-683-7841 for guidance or to file a complaint. The Division also encourages Ohioans to access a range of available resources on its website by clicking here.

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John Crist (KRIST), Director of Compliance, Division of Securities, Ohio Department of Commerce
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About the Division of Securities
The Division of Securities is part of the Ohio Department of Commerce. The department is Ohio's chief regulatory agency, focused on promoting prosperity and protecting what matters most to Ohioans. We ensure businesses follow the laws that help them create jobs and keep Ohioans safe. To learn more about what we do, visit our website at com.ohio.gov.