PODCAST
Investing Wisely in 2025: Avoiding Scams and Achieving Your Financial Goals
Many of us view January as a time to make a fresh start, and as a time to bid farewell to bad habits. In thinking about your New Year's resolutions, have you considered whether you're making financially healthy decisions?
On this episode, we sit down with Gerri Walsh, President of the FINRA Investor Education Foundation and Senior Vice President of Investor Education, to uncover the trends and tips investors need to get their finances in order for 2025.
Resources mentioned in this episode:
FINRA Investor Education Foundation
Protecting Consumers from Fraud
Listen and subscribe to our podcast on Apple Podcasts, Google Podcasts, Spotify, YouTube or wherever you listen to your podcasts. Below is a transcript of the episode. Transcripts are generated using a combination of speech recognition software and human editors and may contain errors. Please check the corresponding audio before quoting in print.
FULL TRANSCRIPT
00:01 - 00:23
Margherita Beale: Many of us view January as a time to make a fresh start, as a time to bid farewell to bad habits. In thinking about your New Year's resolutions. Have you considered whether you're making financially healthy decisions? On this episode, we will go behind the scenes with FINRA's head of Investor Education to uncover the trends and tips you need to get your finances in order for 2025.
00:32 - 00:55
Margherita Beale: Welcome to FINRA Unscripted. I'm one of your new co-hosts, Margherita Beale. I'm pleased to welcome to the show a very special guest to discuss New Year's resolutions and advice for investors. Joining me as our first guest of the year is Gerri Walsh, President of the FINRA Investor Education Foundation and Senior Vice President of Investor Education. Gerri, welcome back to the show.
00:55 - 00:56
Gerri Walsh: Thank you for having me.
00:57 - 01:06
Margherita Beale: So to kick us off, can you introduce yourself and share a bit about how you got to this point in your career with FINRA, as well as what drew you to investor education?
01:07 - 02:18
Gerri Walsh: Oh my goodness. I could talk all day about what drew me to investor education, but I am the head of Investor Education at FINRA, and I'm also president of the FINRA Investor Education Foundation. And the reason that I got into this space is because when I went to law school—I consider myself a recovering lawyer—when I went to law school, in that very first year, I more than doubled all of the debt that I had accumulated from undergrad. I was the daughter of immigrants. My parents hadn't gone to college. So first generation American, first generation college, and I didn't really understand how interest compounding worked, especially when it came to debt. So I thought that I would graduate from law school with times four the debt that I had from undergrad, but I ended up graduating with times seven, and I vowed that if I could do anything to keep anyone else from making those same kinds of mistakes, I would do so.
02:18 - 03:06
Gerri Walsh: So I worked for five years as a lawyer at a private law firm, did litigation, and when I paid off all my loans, I started looking around for something that I really wanted to do. And I got a job at the SEC, in the Enforcement Division, did that for three years. Absolutely loved it. Great experience, but it led me off the beaten path for lawyers. I got an opportunity to be something like a senior counsel, chief of staff, to the head of a newly created office, the Office of Investor Education, and it's now known as the Investor Education and Advocacy. It was then known as the Office of Investor Education and Assistance at the SEC, and I never looked back.
03:07 - 03:17
Margherita Beale: Thank you so much for sharing that. To dive in, can you just let us know what some of the most prevalent scams and challenges faced by investors in 2024 were?
03:18 - 05:15
Gerri Walsh: So, it depends on whose data you look at. Certainly at FINRA, the out-and-out scams. So these are unregulated individuals touting unregistered investments. So people that are outside the realm of FINRA regulation or SEC or the state securities regulation, we saw an increase in the number of imposter scams across the board, but one in particular that resulted in us issuing threat notices to industry, but also in Investor Insights article for retail investors is this social media imposter scam where the scammers were purporting to be financial celebrities, whether it was the heads of very well known hedge funds or people that you see on network or cable TV who are known for talking about investing, and the ads would appear on Facebook and Instagram, and they would purport to be offering a class, some kind of learn about investing mechanism for free. And when people clicked on those ads, they were brought to a telegram account or WhatsApp account for this private investment group that was very much off channel. And so FINRA warned the public about this. And that's the kind of imposter scam that we're nervous about because it's propagated on social media. And then it takes people to channels that typically the messages are deleted. So even if somebody saves all the communications that they have, it can be really difficult to put a case together based on these kinds of cases because the messages disappear.
05:16 - 05:25
Margherita Beale: So looking at 2025, investment scams are likely to continue to evolve. So what should investors be on the lookout for in the year ahead?
05:26 - 06:35
Gerri Walsh: Looking ahead to 2025, AI will continue to be used to propagate scams. In late 2024, the Securities and Exchange Commission issued an investor bulletin on the use of AI in imposter scams. Fraudsters were using AI generated video to pretend to be registered broker dealers, and we're going to see likely an increase in the use of AI. We're also likely to see a continuation of the propagation of fraudulent investment opportunities through social media channels and on not only traditional social media channels, but also some of the social media channels like WhatsApp and telegram, places that most registered firms are not using to communicate with their customers. Imposter scams was something that the Federal Trade Commission noted in 2024 and in 2023 as a rising area. And I think when it comes to investment scams, that's going to continue to be true.
06:36 - 06:44
Margherita Beale: I know crypto scams are something else that's often talked about. Do you foresee that continuing into 2025?
06:44 - 07:39
Gerri Walsh: I do think that in the year ahead will continue to see crypto-related scams. Crypto is frequently used as the payment method of choice for financial fraud, especially the types of financial fraud that's perpetrated against younger people. A lot of people think that these scams and frauds that involve investments are targeted only at older people who have a certain amount of wealth. And while historically that has been true, the reality is that younger people are increasingly targets for fraud. And again, crypto is increasingly the payment method of choice for participating in some kind of financial opportunity scheme, but also investing in crypto assets that don't actually exist, that are fraudulent crypto assets on fraudulent crypto platforms.
07:40 - 07:52
Margherita Beale: On a bit of a lighter note, the new year is a great time to take stock of our finances. So what does a thorough financial checkup entail for the responsible investor as we look to the year ahead?
07:52 - 09:02
Gerri Walsh: Well, the most important thing is to get organized. And a lot of us, when we set New Year's goals, we think big. We think, I want to lose 25 pounds, but we don't really break it down into segments that are really SMART goals: specific, measurable, attainable, realistic and time bound. And I think the most important thing to get started with is to get organized with your financial documents. Take stock of where you are at the beginning of the year. What are your income sources? What are your debts? What does your individual balance sheet look like? And if you have a spouse, a partner, a family, what does your household financial balance sheet look like? Because thinking about how you might adjust your spending, whether you need to seek additional income and how you might use investing as one of the strategies to increase your income, really requires you to first see where you are.
09:03 - 09:14
Margherita Beale: As you mentioned, resolutions can be hard to maintain for many of us. So what are some steps that people can take to ensure that these resolutions stick throughout the year?
09:15 - 09:41
Gerri Walsh: Making them manageable? Getting them into bite sized chunks can help a great deal, and also making sure that the resolutions that you make are realistic for you. Because if friends of yours are similarly on an investing journey but they've got a different situation, they might have more money or less money. That makes it a little bit tough if you're constantly comparing yourself with somebody else.
09:41 - 10:23
Gerri Walsh: A lot of us, we hear about FOMO a lot, fear of missing out, but FOPO, fear of other people's opinions, can be a big driver. So try to make sure that you're focused on your own situation, on your own goals, making those bite sized chunks. And one of the first things that you can do is as you look at your financial reality, then draft a spending plan, a budget that's realistic, and make sure that you include saving and investing as part of that makes sure that you've got an emergency plan or emergency savings account, and then make sure that you're giving yourself the ability to continuously invest throughout the year.
10:24 -10:30
Margherita Beale: For someone just starting their investment journey in 2025, what is some advice that you would give?
10:31 - 11:40
Gerri Walsh: Always start with your goals. Always focus on your goals. And if you don't know how to set goals, we have resources on finra.org and the investor section that can help you think about short term, medium term, and longer term goals. But one of the things that's really important about having a goal is that that then keeps you grounded, and it keeps you from making irrational decisions. A lot of fraudsters use fear and other psychological tactics, but all of us are subject to those psychological tactics, even when we're investing in our regular old accounts. Because fundamentally, money is psychological. Money involves emotion. And if we're making decisions when we're in a heightened emotional state, they tend to be suboptimal. And they might even lead us down a path to fraud. But making rash decisions, making thought out decisions happens when you're grounded with a goal that you want to stick with.
11:40 - 11:52
Margherita Beale: Speaking of FINRA resources, can you tell us a bit about what those resources are that investors could leverage throughout the year to invest wisely and to avoid falling prey to fraud?
11:52 - 13:33
Gerri Walsh: Absolutely, and there are several. One of the most important ones for investors to use is FINRA's BrokerCheck tool. It's available 24/7 on our website, and it's a fantastic way to find out, with just a couple of taps, whether the individual that you are seeking to engage as a financial professional or whoever's making a recommendation to you, whether they are actually registered with FINRA as a broker or with the SEC or a state securities regulator as an advisor. And if they are, you can tap further and find out whether they have a history of complaints or problems with regulators or customer complaints lodged against them. And if you're using an app-based platform or an online platform that's more self-directed, you can also confirm that the firm is registered. Any firm, any individual that is selling stocks, bonds, mutual funds, any type of investment security to people in the United States has to be registered with FINRA. And BrokerCheck is your first step and your best step to make sure that the people that you're working with are registered. But there are some other tools as well. We have a market data center if you want to get information about equities and funds. We have bond data that's available for bond investors, and we have a fund calculator, the fund analyzer, that helps you see the impact that fees can have on your account value over time. For a vast array of mutual funds, exchange traded funds and other exchange traded products.
13:34 - 13:48
Margherita Beale: Thank you. And for our listeners, these resources will definitely be linked in the show notes. So as we wrap up, if listeners could take away just one piece of advice from today's discussion, what would you want it to be?
13:49 - 14:05
Gerri Walsh: Well, you don't want to set resolutions that you can't keep. So, give yourself the grace and space to set simple, specific goals for yourself, and use FINRA as a resource to help you get started on your investing journey.
14:06 - 14:37
Margherita Beale: Well, that's it for today's episode of FINRA Unscripted. Gerri, thank you so much for joining me to talk about the ways in which investors can tackle the year ahead responsibly. Listeners, if you don't already, be sure to subscribe to FINRA Unscripted wherever you listen to podcasts. If you have any comments on today's episode or ideas for future episodes, you can email us at [email protected]. Today's episode was produced by me, Margherita Beale, and edited and engineered by John Williams. Until next time.
14:37 – 14:42
Outro Music
14:42 - 15:05
Disclaimer
Please note FINRA podcasts are the sole property of FINRA, and the information provided is for informational and educational purposes only. The content of the podcast does not constitute any FINRA Rule or amendment or interpretation to such rules. Compliance with any recommended conduct presented does not mean that a firm or person has complied with the full extent of their obligations under FINRA Rules, the rules of any other SRO or securities laws. This podcast is provided as is. FINRA and its affiliates are not responsible for any human or mechanical errors or omissions. Parties may not reproduce these podcasts in any form without the express written consent of FINRA.