Just weeks after ASIC published an information sheet on how the law applies to social media influencers or “finfluencers” and licensees who use them, Danielle Press addressed the issue again in her speech at the AFR Cryptocurrency Summit this week.
“Over recent years, we have witnessed the rise of social media influencers and celebrities promoting crypto-assets and other financial products,” Mr Press said.
“Anyone posting about financial products online must consider whether what they say is considered financial advice and whether it complies with the law.”
Ms Press added that ASIC is keen to learn more about the “threats and opportunities” of crypto-assets, and encouraged those in the sector to actively campaign against and interrupt scams.
The guidance released last month outlined activities where influencers may contravene the law if they are unaware of their legal requirements, considerations they should take, and also guidance for licensees who are engaging with influencers, with ASIC warning: “If we see harm occurring, we will take action to enforce the law.”
Shortly after its release, Dr Angel Zhong – who is a senior lecturer in finance in the school of economics, finance and marketing at RMIT University – applauded the move, after recent research by the university found that financial information consumed online influenced investment decisions.
“Unverified investment advice is no different to fake news, which is frequently flagged by social media platforms that urge viewers to read with caution,” Dr Zhong said.
“Newbie investors are particularly susceptible to receiving dodgy financial advice, as the internet replaces traditional outlets like accredited financial advisers.
Meanwhile, a survey conducted by ASIC last month found that 33 per cent of 18 to 21-year-olds follow at least one financial influencer on social media, while 64 per cent of young people said their financial behaviour has changed as a result of following an influencer.
Late last year, the chief commercial officer of advice tech provider Midwinter, Steve Davison called for “a fairer-level playing field” for advisers in competition with finfluencers.
“To be frank, if we look at various surveys, the biggest go-to for advice is family and friends who will have a whole bunch of biases and experiences that won’t always be good or relevant to the person asking the question,” Mr Davison said during an episode of the ifa Show.
“It feels like advisers have one hand tied behind their back… I think it’s bigger than just the regulators.”
