On April 2, 2026, the Financial Industry Regulatory Authority (“FINRA”) Investor Education Foundation (the “Foundation”) published a brief (the “Brief”) examining the demographic characteristics, investment knowledge and fraud vulnerabilities of retail investors who reported using social media to inform their investing decisions or making investing decisions based on the recommendation of social media personalities dispensing financial advice, or “finfluencers.”

The Brief found that finfluencer followers are predominantly younger, male, hold lower portfolio values and are more likely  from U.S. racial demographic minorities than investors who do not rely on these channels.  Nearly half of social media users relying on finfluencers agreed that “people like me aren’t usually investors,” suggesting these platforms may be drawing in market participants who might otherwise remain on the sidelines.  A central finding of the Brief is a pronounced “knowledge-confidence gap” among finfluencer followers.  This group scored lower on objective investment knowledge tests while simultaneously rating their own subjective knowledge higher.  This pattern of overconfidence, the Brief notes, appears related to economically meaningful outcomes, particularly with respect to fraud susceptibility and victimization.

The Brief concluded that social media’s role in investing presents both potential costs and benefits.  These platforms appear to be successfully engaging a new, more diverse population of investors and fostering community and educational content.  Social media users reported significantly stronger non-monetary motives for investing, including entertainment, social activity and supporting personal values, including environmental, social and corporate governance issues.  However, the combination of lower objective knowledge, higher subjective confidence and demonstrated fraud vulnerability raises concerns.  Broker-dealers focusing on retail investors should take note of the fraud vulnerability data as regulators – including FINRA –sharpen their focus on social-media-driven investment activity, making proactive compliance measures and supervisory procedures around digital marketing and influencer engagement increasingly critical.  Read the Foundation’s full Brief here.