SALT LAKE CITY — If you’re online, it’s difficult to avoid all the noise surrounding financial advice and planning. So how do you know who to trust?
“Confidence and likeability are different than qualifications, and oftentimes when I see TikTok videos or influencers, I’m never quite sure what their qualifications are,” said Jordan Hadfield, vice president of wealth management for Smedley Financial in Salt Lake City.
Hadfield explained that aside from not knowing whether someone on social is an expert or not, financial advice floating around the internet just doesn’t cut it for some consumers.
“For example, I hear influencers say all the time, 'If you want to be a multimillionaire in retirement, put 15% into a Roth IRA.' Generally speaking, for most people this is great advice, but for some individuals it's actually the wrong advice, and these influencers don’t know your specifics," said Hadfield. "It’s very difficult for them to determine what path you should be taking.”
While there are some financial influencers or “finfluencers,” as they’re called, that give good broad advice, there are red flags to look for.
“A lot of people out there are just viewing this as a means to make quick money off people that are just trying to make it through in a hard economy," said Robert Cummings, director for the Utah Division of Securities. "I would say that the minute that they’re offering you a class or they’re willing to train you how to do this type of trading so you can make this type of money, it’s a scam.”
Cummings agrees with Hadfield that financial planning and investing is not one-size-fits-all, and they take the dissemination of such information seriously.
“If they’re online and they’re offering to give you financial advice in return for being paid, that is regulated, licensed activity," said Cummings. "You’re not going to have a licensed professional doing that because we’ll come in and pull their license.”
One small mistake can derail your financial journey, so before you take advice, think twice.
“Each area of financial advising has a great impact on your long-term financial success and stability, and it just can’t be summed up in a five-step process in a 30-second video clip,” Hadfield explained.
When you come across one of these videos, Cummings said to listen to how they frame their advice.
If you find a source that gives two sides of advice and they’re not talking in absolutes while noting there are risks, that may lend more credibility than someone who says, "I know how to turn $1000 into $1 million in no time."
Cummings and Hadfield advise that if you need true financial planning, it’s always best to go to the trained professionals who can be easily vetted.
