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In the era of social media, we benefit from a near-constant stream of bite-sized advice about everything, including personal finance. Information that might have taken serious research time in the past now arrives in front of our eyeballs daily, thanks to a few black box algorithms. In fact, 79% of millennials and GenZers say they have gotten financial advice from social media.

While this advice is accessible and relatable and often sounds true, with thousands of self-styled finance gurus, it’s difficult to know where to start. How does a person weed out the nonsense from the expert financial information? 

We asked three finance professionals about their screaming red flags when it comes to self-proclaimed “experts” online and what you should look for instead. Here’s what they said. 

Shady Credentials

It’s important to know that financial influencers do not have to be vetted in any way, even though they are creating content about an industry that is highly regulated. As an alternative, there are plenty of qualified voices out there. At most recent count, there are 98,967 certified financial planners in the U.S. (and some even have social media channels with regulator-approved content).

Connor Bauserman, a financial planner at Preferred Financial Group, LLC, said CFPs are held to the fiduciary standard, meaning they are required to put their clients’ best interests before their own.

While you may think all financial advisors should be held to this standard, they aren’t. Bauserman said many insurance agents are held to the “suitability standard, which means that as long as the investment is suitable, then they can sell it you.” Because influencers are not being held to any legal standards whatsoever, they can make any number of false statements, false promises or guarantees. 

Dr. Nicole Simpson, CEO of Harvest Wealth Financial, said it’s particularly important to steer clear of anyone who labels themselves a “financial coach,” as the title has no unified credentials, authority or testing requirements behind it. 

What can consumers do to protect themselves? Several experts suggest going to BrokerCheck and typing in an advisor’s name. Click on “more details” to pull up their years of experience and a list of exams and certifications. If they’ve passed Series 6, 7 or 65/66, then they’re held to the fiduciary standard. If they’re not listed at all, they don’t have a license to give any investment advice. 

Generic Advice 

Though certain principles can be applied broadly (for example, keeping an emergency fund to cover 3-6 months of expenses), personal finance is personal for a reason.

Dr. Preston D. Cherry, certified financial therapist and CFP at Concurrent Financial Planning, said, “There’s a reason financial regulators frown upon professionals giving direct financial advice on social media.”

Generic advice is easy to misinterpret. 

Dr. Simpson shared the example of debt reduction: “Influencers may say, ‘Get rid of all your debt now!’ But how do you do that? A planner will help evaluate your debt and give you tangible steps to take.”

An influencer might say you should pay off a smaller credit card balance first, to get a faster win. But if you’re wrangling one balance of $1,000 with an 18% interest rate and a much larger $10,000 bill with a 29.9% rate, putting your payoff efforts toward the bigger balance first means paying less interest overall.

Similarly, influencers tend to focus only on the one or two things that worked for them, whether it’s passive income, rental properties or chasing the stock market. Their personal stories are compelling, but a genuine financial planner can listen to your story and offer a broad set of tools and processes to help you meet your goals.

That said, don’t be afraid to bring up new ideas you see on social media with your planner — that way you can evaluate them with someone who has your interests front and center.

No Disclosures Up Front 

Influencers can say almost anything, but are they telling the truth? Are they citing their sources, or is it mostly vibes? Legitimate advisors are transparent about their fees, potential conflicts and track record.

Furthermore, Dr. Cherry notes that investment influencers overuse the phrase “do your own research” to let themselves off the hook. Of course, educating yourself is always wise, but the real goal here is to “absolve the so-called influencer of any legal liability of giving advice that may fail. There are too many hot takes for content instead of financial education with context.”   

Selling Over Advising

To their credit, many influencers are trying to make a complicated topic easier to digest. But as personal finance becomes a bigger topic online, opportunities for bad behavior abound. Dr. Cherry said the best kind of social media content offers “financial education that does not harm and encourages its audience to better themselves. Selling misinformation for profit or influence messes with people’s lives and finances.”  

Lack of Education and Experience

Finally, Dr. Simpson said, “In the vulnerable area of finances, experience and education matters.” 

Look for meaningful letters behind an advisor’s name. Bauserman said “CFP or ChFC shows that they went through more training and schooling than the average licensed advisor, not to mention that they’re legally bound to the fiduciary standard.” 

When it comes to money, Dr. Cherry said, the biggest hurdle to working with someone is trust. When influencers or even finance professionals are underqualified or inexperienced, it erodes trust in personal finance expertise. After all, “professional licenses, certifications and designations are to serve the people better, not to protect the professional.” 

Clearly, people are hungry for personal finance content, and powerful online stories can teach and motivate us to get better in this realm. As you take in social media content, remember these red flags so you can be inspired and stay curious while also committing to getting rock-solid counsel from someone who deserves your trust.

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