Can You Trust Financial Advice You Find Online?
(NewsUSA)
- Can you trust the financial advice you find online, including on social media? Nope. And a majority of people already don’t trust online financial advice. According to the CFP Board Consumer Sentiment Survey — Trust, But Verify, 71% of investors indicated little to no trust in the financial planning advice received from social media. There was also a high level of mistrust (51% of those surveyed) regarding advice from generative artificial intelligence (AI) tools, including ChatGPT and Google Bard. In addition, the survey found that while consumers are wary of online advice, they are far more comfortable acting on that advice if it’s been verified by a financial planner.
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You don’t take investment tips from strangers on a street corner. And that’s what the internet is like: one big street corner full of strangers offering advice. They don’t know your financial situation, goals, age, or life stage. Online advice tends to be generic and one-size-fits-all, lacking customization to fit individual circumstances. Worse yet, you don’t know whether the online stranger has any expertise — or a secret financial incentive to steer you to one type of investment over another. The “advice” could simply be a lie.
Information vs. Advice
So, what’s the internet good for when it comes to financial advice? It’s a terrific tool to gather information as opposed to advice.
Here are three examples:
- Learn the difference between various types of stocks, bonds, and mutual funds and their performance history — not which ones to purchase.
- Learn the difference between insurance options — not which type to purchase, how much, or which company to buy from.
- Learn about the different ways to invest for college or retirement — but not which path works for your circumstances.
No matter what information you are looking for, visit multiple online platforms and compare what each says. But don’t make decisions until you get personalized advice from a CERTIFIED FINANCIAL PLANNER™ professional.
The information you gather online can prepare you to ask more intelligent questions and understand your options when you sit down with a CFP® professional. Once these experts know you, your family responsibilities and the levels of risk with which you are comfortable, they’ll offer advice tailored to your specific needs and goals. CFP® professionals make a commitment to CFP Board to act as fiduciaries, which means they will always put your interests first when providing financial advice.
Five Tips Worth Taking
With countless influencers and self-proclaimed experts vying for your attention, it's crucial to approach online financial guidance with a discerning eye. With that in mind, check out these five tips from CFP Board’s Lets Make a Plan website to help you effectively navigate the digital realm of financial advice. Work with a CFP® professional when you need to verify financial strategies you heard of online or when making any significant financial decisions. Find your CFP® professional today.
