Australia’s financial regulatory body is intensifying its scrutiny of social media “finfluencers” who are disseminating questionable financial advice to online audiences.
The Australian Securities and Investments Commission (ASIC) has already sent cautionary notices to four influencers believed to be offering financial guidance without the necessary licenses. These individuals are also suspected of engaging in misleading or deceptive practices.
ASIC has expressed concerns that these influencers may have been promoting claims of “guaranteed returns,” a red flag for potential financial misconduct.
In addition to targeting individual influencers, the commission is conducting reviews of several financial service providers. Among them, 15 influencers operate under these providers’ licenses, highlighting the need for a broader regulatory approach.
This initiative is part of a larger global collaboration involving 17 national regulators from various continents, aiming to tackle the widespread issue of unregulated financial advice on social media platforms.
Supporting the urgency of this crackdown, recent research by Moneysmart reveals that 63% of Australian Gen Z individuals, aged 18 to 28, turn to social media as a source of financial information. Alarmingly, more than half of these young Australians express some level of trust in the financial advice they encounter on social media (56%) and from finfluencers (52%).
“Unlawful finfluencer activity doesn’t respect borders, which is why regulators are taking strong action together for a second year in a row,” ASIC commissioner Alan Kirkland said.
“What people see online is shaped by algorithms designed to drive clicks and engagement, rather than promoting accurate information. This means consumers are more exposed to biased or misleading content.”
ASIC is focusing on finfluencers who target Australian investors and who discuss a range of financial products, including leveraged derivatives, shares, and exchange-traded funds.
“Finfluencers must either hold an AFS licence or operate as an authorised representative to legally provide financial product advice or arrange for their followers to deal in financial products,” Kirkland said.
“When viewing financial content on social media, we urge Australians to check a creator’s credentials, and senseâcheck the information before acting on it.”
This particularly applied to any promises of “easy money” or “guaranteed returns”, which Kirkland said could be illegal.
Providing unlicensed financial advice is punishable in Australia by five years in prison or a $1 million fine.
Under current arrangements in place since 2022, unlicensed finfluencers may operate as authorised representatives of AFS licensees, however ,responsibility for supervising finfluencer conduct and the liability for any breaches remains with the licensee.
ASIC also expects licensees to have documented arrangements for supervision, and records of it being carried out.
“Licensees remain responsible and liable for what their representatives say and do online,” Kirkland said.
“We expect active supervision, not a setâandâforget approach.”
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