On the back of its participation in the Global Week of Action Against Unlawful Finfluencers along with eight other international regulators, the Australian Securities and Investments Commission (ASIC) said it has issued warning notices to 18 social media finfluencers.
According to the regulator, it suspects that these finfluencers have engaged in “unlawfully promoting high-risk financial products and providing unlicensed financial advice to Australians”.
Key to ASIC’s concern is related to “so-called trading experts” that it said are providing unauthorised financial product advice and promoting high-risk, complex investment products that can cause “real consumer harm”.
This includes products such as contracts for difference and over the counter derivative products.
It also said the social media finfluencer content often includes “misleading or deceptive representations about the prospects of success” related to taking part in their trading strategies or the products they promote, as well as posting images of “lavish lifestyles, sports cars and other luxury goods”.
“We are seeing a pattern where these unlicensed finfluencers invite consumers to join their closed communities or forums to learn their secrets to success or copy their trades,” ASIC commissioner Alan Kirkland said.
Noting that Moneysmart had previously found that 41 per cent of young Australians seek financial information or advice from online sources such as social media, ASIC urged investors and consumers to check finfluencers’ credentials on its professional registers search tool.
“Australia’s financial services laws protect investors and promote market integrity. They set minimum requirements and provide important protections for investors if something goes wrong,” Kirkland said.
“If you spruik or discuss financial products and services online, you need to carefully consider how the law applies to you and seek legal advice if you are unsure.”
The regulator stressed that, unless a finfluencer is licensed, an authorised representative or exempt, they’re not legally permitted to carry on a business of providing investment advice in Australia.
ASIC added that it conducts targeted monitoring of financial discussion by finfluencers who feature or promote financial products and, “where we see harm occurring, we will take action to enforce the law”.
The regulator said this crackdown is part of coordinated actions on unauthorised finfluencers that it and eight other regulators from the UK, United Arab Emirates, Italy, Hong Kong, and Canada took last week.
“Together, the nine regulators used a combination of regulatory and enforcement powers including arrests, warning notices, website takedowns, educational schemes with authorised finfluencers and consumer awareness programs to put unauthorised finfluencers on notice and warn consumers of the risks of unauthorised and misleading finfluencer content,” ASIC said.
Kirkland added: “Regulators across the world have joined forces to disrupt unlawful finfluencer activity.
“It’s important that consumers separate fun from fact when it comes to finfluencer content. Popularity doesn’t equal credibility. Check their credentials and whether they’re licensed or authorised, before checking your money out.”
He also claimed that following the release of INFO Sheet 269 Discussing financial products and services online (INFO 269) in 2022, there has been a “noticeable drop” in the amount of social media posts spruiking financial products and services by unauthorised finfluencers.
“In Australia, after ASIC issued INFO 269, we saw that many finfluencers changed what they were saying or became licensed or authorised representatives to comply with the law,” Kirkland said.
“Australian Financial Services licensees who engage influencers also improved their due diligence and monitoring of finfluencers to ensure they don’t provide unlicensed financial services and that consumers are not misled.”
Lol at all these ‘qualified professional advisors’. I bet you haven’t even outperformed the S&P-500, which is an index that any fool can DCA in. If you only make a CAGR of 5-6% for your clients over a 10+ year timespan, and charge them fees, then kindly do us all a favour and keep quiet.
Good morning ASIC,
When you tie the hands of licensed professional advisers with overregulation, you leave the door open for these unlicensed investment influencers.
With AI now amplifying their reach.
Regards
A licensed multi degree qualified adviser
And yet ASIC is happy to leave all the property experts on social media telling people to sell their homes in order to buy multiple investment house and land properties in rural Australia because property is NOT a financial product.
This will end so badly.
Sadly ASIC have a proven track record of ignoring complaints from financial advisers about miscreant actors in our industry. For years advisers complained about Daryl Dixon, yet only crickets came from ASIC.ASIC were told years before about the unauthorised Melissa Caddock in Sydney whose bones supposedly now rest on the bottom of the ocean. Most complainants have stated that they never even got an acknowledgement from ASIC that their complaint had been registered
Advisers have been complaining about influencers operating in the financial advice industry for over 5 years , yet nothing seemed to happen quickly. They’re not hard to find.
ASIC has an ideological blindspot about complaints coming from advisers. They appear to have assumed that if a complaint comes from an adviser , about the activities of another adviser, or someone pretending to be an adviser, that complaint must come from the adviser on basis of self-interest, probably a complaint about a business competitor.
In other words, the evidence is the ASIC habit is to assess complainsts to always have an element of self interested complaint, and therefore cannot be something whereby the complainant is seeking to improve the reputation of the total industry. It’s the sort of thing Standard 12 tries to encourage, but we still don’t know what ASIC will do with the complaints when they get them.
Helllo, ASIC? I would like to report a finfluencer for misleading and deceptive representations. You know that guy from Blue Heelers, Snr Sargent Tom Croyden? Well, he has been spruiking these ‘balanced’ superannuation funds, but when I check my asset allocation I am in fact in a high growth fund. This was not what I signed up for….. help.
And yet the numerous property spruikers who recommend establishing a SMSF when clients don’t have sufficient equity are able to continue without any restriction.
ASIC’s action against unlicensed finfluencers is both necessary and welcome. The spread of misleading content promising fast wealth and luxury lifestyles blurs the line between entertainment and responsible financial guidance.
We’re now seeing younger Australians — including the children of long-standing clients — suffer real financial setbacks from following unlicensed advice. The bigger concern is that they lose trust in financial markets altogether and become resistant to seeking quality advice later in life, when they’ll need it most.
As licensed professionals, we must continue to raise awareness, uphold high standards, and demonstrate the long-term value of credible, personalised advice.
#TrustedAdvice #ASIC #Finfluencers #FinancialWellbeing #ConsumerProtection
I would give more credence to the advice of finfluencers than the unqualified used car salesman back packer desk jockeys from the evil super funds.