Here’s how to check online financial advice through social media

In the age of influential social media, some investors are turning to platforms like YouTube, TikTok and Instagram for answers to their most pressing financial concerns.

But advisers recommend vetting when seeking guidance online — especially when weighing money decisions with the potential for harmful consequences.

“Because social media is democratized and everyone has a voice, it can be a particularly messy place,” said Douglas Boneparte, a New York-based certified financial planner who is active on Twitter with nearly a quarter of a million followers.

Boneparte, who is president of Bone Fide Wealth and a member of CNBC’s Board of Financial Advisors, said that when sifting through social media advice, it can be difficult to know who to trust and whether the information is accurate.

Despite these risks, social media has become the most popular source of investment ideas for younger investors, according to a CNBC study based on a survey of more than 5,500 US adults in 2021.

When it comes to financial advice on social media, Boneparth urges caution. “At no point should you take a tweet or a post and act on it,” he said.

Instead of taking action based on a viral Instagram video or TikTok post, Boneparth says it’s critical to do your own research, or “due diligence,” before making any money decisions.

“You’re always going to want to do that when it comes to making a decision about your money,” he said, noting there are “incredible, reliable resources” that provide objective information.

When weighing social media tips, you should check the source and whether the information has been verified, Boneparte said. By balancing it with other sources of information, you can avoid making the wrong decision or taking financial advice that “could actually do more harm than good,” he said.

Boneparth says it’s important to remember that financial advice is “personal”, with advisers gathering data and analyzing individual factors before offering guidance.

When he receives questions online through social media messages, he often suggests speaking with a financial professional for more specialized guidance or directs investors to resources to help answer the question themselves.

Of course, finding the right advisor can also take some work, including word-of-mouth referrals, online searches, and interviews. For further verification, you can search for complaints and violations through the Financial Industry Regulatory Authority’s BrokerCheck and the Securities and Exchange Commission’s Investment Adviser Public Disclosure websites.