The Financial Industry Regulatory Authority is raising red flags about the growing sway of social media over investment decisions, and it's hinting that new regulations might be coming.
The Rise of the Finfluencer
In a 16-page report released recently, FINRA spelled out what many market watchers already suspected: social media is fundamentally changing how people invest. The numbers tell the story pretty clearly. According to the report, 45% of investors now receive financial advice from the internet, with 24% specifically turning to social media platforms for investment information. Among investors under 30, that reliance on social media is even more pronounced.
The report emphasizes that "an increasing portion of investors report that social media content directly impacts their investing decisions," and that these platforms are "particularly popular among younger generations of investors." In other words, your investment decisions might be getting shaped by someone's TikTok video while you're scrolling through your morning feed.
At the heart of FINRA's concern are finfluencers—financial influencers who've built followings by dispensing investment advice and market commentary. The problem? Many of these influencers lack proper credentials, and some create serious conflicts of interest. Think pump and dump schemes, market manipulation, and other sketchy behavior that traditional oversight wasn't designed to catch.
The regulator also pointed to emerging technologies like social sentiment analysis tools and alternative data sets as potential blind spots. The implication is clear: the digital landscape is evolving faster than the rulebook can keep up.
Rule Changes Coming?
FINRA isn't just issuing warnings—it's actively seeking input on what to do about all this. The organization is "soliciting feedback" on whether "existing rules appropriately address the risks raised by social media-influenced investing," and whether brokerage firms have adequate tools for supervision, surveillance, and compliance in this new environment.
Comments are due by May 13, 2026. After that, FINRA—which operates as a self-regulatory organization under SEC oversight—could issue new guidance for member firms or propose formal rule changes to the SEC.
Global Crackdown Underway
The United States isn't alone in grappling with this issue. Malaysia and China have recently tightened restrictions on influencers, particularly those offering advice on specialized topics like finance and healthcare.
China now requires influencers in these niches to prominently display their credentials, while Malaysia has implemented even tougher measures that can result in substantial fines and potential jail time for violations. It seems regulators worldwide are deciding that financial advice from unqualified internet personalities is a problem worth taking seriously.