FINRA warns that finfluencers pose increased risks to investors

In the so-called “wild west” realm of social media financial influencers (or “finfluencers”), investors in the autonomous market are particularly at risk of fraud and bad advice, the FINRA regulator has warned.

During a panel discussion this month at the FINRA Annual Conference in Washington, D.C., Megan Powers, Director of Wealth Management Workplace Compliance at Morgan Stanley, emphasized that clients (and advisors) who use generative artificial intelligence tools like ChatGPT can be inadvertently influenced by self-proclaimed finfluencers.

“[ChatGPT]is learning from these social media influencers and blogs and things like that. And that may or may not be relevant to investors, right?” she said. “In addition to understanding what social media influencers are saying, it is important to understand where AI is getting its information from and what input investors are putting into it.”

Powers argued that as AI wields greater influence among influencers (and in advice more broadly), financial advisors should act as intermediaries for their clients, noticing unusual behavior and escalating concerns when necessary. However, in a self-directed space, the layer of oversight that an advisor provides may not exist.

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“Even with influencers in the social media space who have subscribers and a lot of followers, they say, ‘This shouldn’t be considered investment advice,’ but retail investors are strong. And we’ve seen that. Return to 2021 with GameStop“It’s hard to differentiate between someone who has the background and experience and a beginner who is just looking for followers,” she said.

Panelists also dug deeper Reflected in FINRA’s April 2026 report We show that social media users and followers of finfluencers are more likely to become victims of fraud, despite conducting more due diligence when vetting financial professionals (among fraud targets, approximately 69% of followers of social media users and finfluencers suffered losses, compared to approximately 29% of other users).

In 2021, FINRA conducts targeted testing We published information about companies that employ such finfluencers and also published tips for broker-dealers working with influencers. This includes evaluating influencers’ backgrounds and past social media activity for compliance and reputational risks, and maintaining records of public communications (many compliance professionals have found this tip) borderline unfeasible).

In 2024, FINRA has filed several enforcement actions This comes as a result of scrutiny of paid influencers by testing and research companies.

During a panel discussion, FINRA Vice Chair and Chief of Staff Sarah Greene noted that while influencers who dispel false and misinformation are often not acting out of malice, they don’t feel like there are sources of information from individuals with their own backgrounds and life experiences during their “own investment journeys.”

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“So they used it as an opportunity to start their own channels and share information,” she said, adding, “There are a lot of people who don’t realize they’re stepping into a somewhat regulated area.”

According to Olivia Valdez, senior principal investigator at FINRA’s Investor Education Foundation, AI has posed unique challenges for researchers evaluating investor (and influencer) behavior.

Investors often don’t believe information generated by AI, Valdez said. She recalled a study in which the foundation presented the same information to two groups of investors, telling one group it was from an AI and telling the other group it was created by financial experts. The latter group trusted the information more.

“Many different sources acknowledge that AI has reliability issues, but reliability does not preclude its use,” she said. “Of course, just like social media and influencers, there are big risks with AI. We don’t know what’s going on. What do we do if something goes wrong?”

For Powers, as agent AI models continue to gain traction and are likely to be used for consumers in the near future, it’s becoming increasingly important for companies to educate their investors. Powers emphasized that companies should tell their customers what to look out for in order to be prepared.

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“Today we talked about influencers. Tomorrow’s influencers could be human-like AI agents, right?” she said. “So it’s even more dangerous.”