Should you trust social media or AI for financial advice?

Whether you’re watching videos from financial influencers (“finfluencers”) on social media or turning to generative AI for answers about budgeting, retirement planning, taxes and investing, the at-your-fingers, instantaneous nature of getting this financial advice can be tempting—and potentially risky.

While this content can seem like it’s saying all the right things, experts caution against taking it to heart as if it were a personal financial plan.

"What concerns me about the financial advice people are getting from these platforms is that it can be technically correct but completely wrong for a specific person," said Karla Salinas, a financial planner at BOK Financial®. "When someone brings me a financial tip from social media, my first reaction is usually not whether this is a good idea or strategy; it's whether this is a good strategy for this particular person. Good and accurate financial advice is very personal and unique to each individual."

How to evaluate online financial advice

To be sure, some financial truisms are tried and true. Salinas puts "pieces of financial advice that are so general they can apply to everyone" in this category, such as "spend within your means" or "start saving as early as possible." Those are generally good rules to follow.

But then there's the advice that, while it might be good for one person, it can be completely wrong for another. In that category, Salinas points to one of the more common recommendations floating around online: Skip the stock market and buy rental properties instead.

“While in many areas the growth of real property values has exceeded the average return of the S&P 500, this is terrible advice for the vast majority of people—for instance, if they do not have a healthy amount of liquid savings, if they have to take on a lot of debt to acquire properties or if they do not have the time or skill to effectively manage the properties,” she explained.

That's the challenge with online financial advice. The person, or AI, delivering it likely doesn't know your income, tax situation, financial goals, family dynamics, risk tolerance or timeline.

While a good financial strategy prepared by a financial planner considers all those things, a 60-second video or generative AI response usually doesn’t.

"Good financial advice requires more information from the person who is seeking it, such as their income, tax bracket, goals, age, assets, family dynamics, risk tolerance, time horizon and so on," Salinas said. "The problem with getting financial advice from social media is that these types of questions or telling someone that 'it depends on their own unique circumstances' doesn't get the clicks and views content creators are looking for so they have to lead with aggressive, punchy advice that is simply not nuanced enough to be considered sound financial advice."

Where online financial advice gets it right

However, that doesn’t mean online financial advice is all bad.

In fact, Salinas believes it has played a meaningful role in improving financial literacy.

For many people, social platforms are introducing concepts like budgeting, investing, retirement accounts, taxes and insurance years before they would have encountered them otherwise.

"I think social media absolutely has had a positive impact on financial literacy," Salinas said. "While you should not look toward social media for specific and sound financial advice that applies to your unique circumstances, it can be an incredibly valuable tool to get people thinking about money in a way they may not have previously."

That’s especially true for people who didn’t grow up talking about money at home.

"If you grew up in a household where finances were not discussed or in a household where people did not manage money well, you might think that is the norm and follow a similar path," she said. Online financial advice can show you that alternative approaches to money are out there, serving as an entry point into personal finance.

However, the problem arises when people mistake education for individualized advice. As Salinas said, "The healthiest approach and use of social media is using it as a tool that provides education or sparks a thought or question which leads you to seek professional guidance and ultimately take action on those recommendations."

What AI can and can’t tell you about your money

The same principle applies to generative AI.

Whether someone is researching investment options, evaluating retirement strategies or trying to understand a tax question, AI can be a helpful starting point.

"AI has meaningfully changed how people seek financial guidance," Salinas said. "Instead of starting with a financial advisor, many people now begin by asking AI tools questions about budgeting, investing, taxes, retirement planning and major financial decisions."

She sees some degree of benefit to that approach. "Some benefits to using AI before speaking with a financial advisor are that you can become more financially educated on topics first, which can put you in a better position to ask more direct informed questions to your advisor," she noted.

Yet that doesn’t mean generative AI should be your financial advisor, she cautioned.

"The biggest risk is that AI can generate advice that sounds conclusive but is actually incorrect or lacks specificity for that individual's circumstances," she explained. "It can also create a mindset that only the AI recommendations are correct, when in fact AI is unable to grasp the full picture or ask the questions a financial advisor would during a meeting."

A reality check before acting on a financial tip

If you have read a financial tip online that you’re excited about, Salinas recommends asking yourself the following questions:

• Who is this strategy actually designed for?
• Does it assume a particular income level or net worth?
• Does it only work under certain tax rules?
• What are the potential downsides?
• •What happens if the market falls?
• How does this fit with my long-term goals?
• Does it align with my risk tolerance?
• Will it support my family’s needs and priorities?

Most importantly, don’t lose sight of the bigger picture, she cautioned.

“At the end of the day, a financial strategy should support your own goals and not become the goal itself,” she said.