You can find original article here WealthManagement.
Subscribe to our free daily WealthManagement newsletters
In the so-called “Wild West” space of social media financial influencers (or “finfluencers”), FINRA regulators warned that investors in the self-directed market are particularly at risk of fraud and poor advice. During a panel at FINRA’s annual conference in Washington, D.C., this month, Morgan Stanley Wealth Management Workplace Compliance Director Megan Powers stressed that clients (and advisors) who use generative artificial intelligence tools like ChatGPT may be inadvertently influenced by self-fashioned finfluencers. “(ChatGPT’s) learning from these social media influencers and blogs, et cetera. And that may or may not be relevant for an investor, right?” she said. “It’s about not only understanding what these social media influencers are saying, but where is the AI getting its information and what input is the investor putting into it?” Powers argued that as AI wields greater influence among influencers (and in advice more broadly), a financial advisor should act as an intermediary for clients, noting aberrant behaviors and escalating concerns when needed.
However, in the self-directed space, the oversight layer that an advisor provides may be nonexistent. “Even with influencers in the social media space that have subscriptions or a big following, they say ‘this should not be considered investment advice,’ but the retail investor is strong, and we saw that back in 2021 with GameStop,” she said. “It’s harder for people to separate who has the background and experience versus someone who’s a novice that’s just looking for followers.” The panelists also delved deeper into an April 2026 report from FINRA showing social media users and finfluencer followers were more likely to be victims of fraud despite conducting more due diligence when vetting financial professionals (among fraud targets, about 69% of social media users/finfluencer followers lost…