Has online financial misinformation fooled you? You’re not alone.
As the stock market becomes more volatile and unpredictable, it’s natural for investors to look for new sources of information that can provide guidance or insights to help them feel more in control. One of the most popular trends is to turn to social media platforms for tips or strategies on making the smartest trades. But how reliable is online financial advice, and what are the risks of trusting it to tell you what to do with your money?
According to a new survey by Nationwide, dependable financial advice can be hard to come by in today’s digital era. In fact, more than a third (34%) of non-retired investors aged 18-54 have encountered, then acted upon, financial information seen online or on social media that turned out to be misleading or factually incorrect.
Additionally, it’s no surprise that younger investors – whose upbringing coincided with the rise in online information – are approaching the financial advice they find on the internet differently than their older peers. More than four in ten (41%) of Gen Z and 34% of Millennial investors have encountered and acted on misleading or factually incorrect financial information seen online or on social media, compared to just 6% of Baby Boomer investors.
So, how are worried investors supposed to spot financial misinformation online?
“Social media is a powerful tool and a great resource for learning about different financial topics, but it comes with plenty of misinformation as well,” said Rona Guymon, Senior Vice President of Nationwide Annuity Distribution. “Online information can be inaccurate, or not applicable to your situation. That’s why it’s important to do your due diligence on the financial information you find online – or better yet, turn to a financial professional or advisor for help.”
To ensure their clients do not fall victim to faulty financial misinformation found online, advisors are leaning into educational and preventative measures to highlight the importance of verified, reputable financial advice. According to Nationwide’s survey, 60% of advisors are providing guidance to their clients on a case-by-case basis when they’re approached with questions about a specific situation, and nearly the same amount (58%) are educating their clients on the potential risks of misinformation found on social media and generated by artificial intelligence.
“There are some great digital sources out there for accurate and helpful financial information, and you should not be discouraged from learning more about financial planning on your own through them,” Guymon said. “What’s important is making sure you’re verifying advice with a trusted advisor or financial professional before acting on it to ensure your financial plans remain intact for the long-term.”
While there is often a cost associated with working with a financial professional or advisor, Guymon stressed that the cost of making big financial decisions based on bad information can be much more damaging to your long-term financial future.
Need to connect with a financial professional? Nationwide has a team of specialists ready to listen and learn about your unique insurance and financial needs.