FINRA Flags Growing Risks From Social Media, Finfluencers: Signals Possible Rule Changes

The Financial Industry Regulatory Authority has released a new report highlighting the growing influence of social media on investor behavior and the risks arising from the same.

Platforms, Broker-Dealers, Finfluencers In Focus

In a 16-page report released nearly two weeks ago, FINRA noted that “an increasing portion of investors report that social media content directly impacts their investing decisions,” and that social platforms are “particularly popular among younger generations of investors.”

The report noted that 45% of investors receive financial advice from the internet, with 24% reporting that their information comes from social media. Among those under 30, reliance on social media for investing information was significantly higher.

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It calls attention to the growing role of financial influencers, popularly referred to as “finfluencers” on these platforms, who often lack the necessary credentials and can create potential conflicts of interest, such as those seen in pump and dump schemes and market manipulation.

The regulator also flagged the use of technologies such as social sentiment tools and alternative data sets as a potential gray area for oversight. It warned that existing guardrails may be insufficient in the face of such rapidly evolving digital channels.

FINRA Solicits Feedback On Regulations

On the regulatory front, FINRA stated that it is “soliciting feedback” on whether “existing rules appropriately address the risks raised by social media-influenced investing,” and whether firms have the right tools for supervision, surveillance, and compliance.

Comments are requested by May 13, 2026, following which the self-regulatory organization (SRO) under the SEC's oversight might issue new guidance for member firms or propose formal rule changes to the SEC.

Malaysia, China Crackdown On Finfluencers

Recently, Malaysia and China tightened curbs on influencers, especially those offering advice on professional subjects such as finance and healthcare.

China has made it mandatory for influencers in such niches to display their credentials, while Malaysia has instituted tougher rules that can lead to huge fines and even jail time.

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