Finfluencers, Conflicts of Interest, and Sponsored Content

Why this matters

A lot of investing information now comes from social media. FINRA, citing a 2025 study by its Investor Education Foundation, reports that 24% of investors get financial information from social media, and that 35% of investors under 30 rely on it, compared with 13% of those 65 and older.¹ Much of this content is helpful. But the people who make it have to earn a living, and how they're paid shapes what they say.

Follow the money

A conflict of interest exists whenever the person giving you information benefits from what you do next. Common ways that happens online:

• Sponsorships: a company pays for a mention or a review.
• Referral links: the creator is paid for each account opened or product bought through their link.
• Owning what they promote: if their followers buy, the price they hold may go up.
• Selling something: courses, paid groups, or newsletters, where the business depends on attention.
• Commissions: a salesperson paid more for some products than others.

A conflict doesn't mean someone is lying. It means their incentives point somewhere, and you should know where.

The disclosure rules

• Paid securities promotion. Federal securities law makes it unlawful to describe a security in exchange for payment from the company issuing it, or from an underwriter or dealer, without fully disclosing that payment and its amount.²
• Endorsements in general. The FTC tells influencers to disclose any financial, employment, personal, or family relationship with a brand, including free products. The disclosure should sit with the endorsement itself, not only on a profile page or buried in a pile of hashtags. Words like "ad" or "sponsored" work; vague ones like "collab" or "spon" don't.³
• Brokerage firms' influencers. When firms pay influencers, the firms are responsible for those communications. In 2024, FINRA fined one online brokerage $850,000 after roughly 1,700 influencers it paid a flat fee for every new funded account posted content that wasn't fair and balanced, or contained exaggerated, promissory, or misleading claims.⁴

A fictional post: "Up 40% with this app! Easiest investing ever. Get a free share with my link #collab."

Part of the post	What it tells you
"Get a free share with my link"	The creator is probably paid for each sign-up.
"#collab"	A vague label the FTC says to avoid. The relationship isn't clearly disclosed.
"Up 40%"	Over what period? On how much money? Including losses elsewhere? Without those, it's a claim, not evidence.
"Easiest investing ever"	Says nothing about risks or costs.

None of this proves the app is bad. It shows the post is advertising, and should be weighed that way.

Questions to ask any source

1. How does this person or outlet make money, and does what they're saying help them earn it?
2. Do they clearly disclose sponsorships, referral payments, and their own holdings?
3. Do they show losses and mistakes, or only wins?
4. Are they registered to give investment advice? FINRA's BrokerCheck shows registration and disciplinary history for brokers and many advisers.⁵
5. Do they push you to act fast?

Key takeaways

• Many investors, especially younger ones, get investing information from social media.
• Anyone who benefits from what you do next has a conflict of interest. Find out how they're paid.
• Promoting a security for pay without disclosing it is unlawful, and the FTC expects clear disclosure of brand relationships.
• Popularity isn't expertise. Ask about money, disclosure, losses, registration, and pressure.

Check your understanding

A creator praises a small company's stock and mentions at the very end of a long video description that the company paid them. What's the issue?

1. There's none. The payment was disclosed in writing in the description, which is all the rules ask creators to do.
2. It's a conflict of interest, and the FTC says disclosures in a video belong in the video itself, where viewers notice them.
3. The stock must be a scam, because legitimate companies never pay anyone to talk about them.

Which question best reveals a source's conflict of interest?

1. How many followers do they have, and how many of them say they've made money?
2. How confident do they sound, and how often have they been right before?
3. How do they make money, and does my action help them earn it?

What's next

Conflicts of interest are one thing; outright fraud is another. The next lesson, Scams: Pump-and-Dumps, Fake Gurus, and Deepfakes, covers how today's investment scams work and how to spot them.