The Financial Planning Association of Australia (FPA) CEO says it is encouraging to see ASIC take action on the risks posed by social media influencers – or finfuencers – and what is legally allowed when discussing financial products and services online.
Last month, ASIC released Information sheet 269 to provide clarity on how the law applies to social media influencers and the licensees who use them.
The new guidance 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.”
As noted by the corporate regulator, “misleading and deceptive conduct” identified would amount to a criminal offence.
“ASIC is reminding finfluencers that the law does apply to them and warning them that ASIC will take legal action if necessary,” FPA CEO Sarah Abood said this week.
“Financial planners are subject to a high degree of oversight and regulation, and consumers can have confidence in the advice they receive from a professionally qualified and registered financial planner. None of these protections apply where finfluencers are concerned.
“Finfluencers can definitely play a role in improving financial literacy and confidence among consumers, and they are often very effective at providing that information in an engaging way online
“However they are not legally able to give personal or general advice on financial products, and anyone acting on a recommendation from this source is essentially on their own if things go wrong.”
Ms Abood reiterated that anyone seeking advice should do so through “qualified, professional financial planners who are complying with a code of ethics to provide advice in your best interests”.
It comes after ASIC commissioner Cathie Armour suggested that regtech companies could facilitate online discussions about financial products and services, replacing unregulated finfluencers.
Speaking at the annual Accelerate RegTech 2022 event last week, Ms Armour said: “Recognition of the importance of consumer protection in financial services has meant that financial advice is specifically regulated.
“So, accepting that the use of technology has the potential to improve financial inclusion and develop people’s financial capabilities, how can we best ensure that these services are effectively provided in compliance with our laws?
“It strikes me that this is an area where regtech has a real place.”
Dr Angel Zhong – who is a senior lecturer in finance in the school of economics, finance and marketing at RMIT University – also applauded the move by ASIC, after a 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.”
Let’s remember that the FPA represents “the Advice industry” including the Barefoot Adviser, AwareSuper and Finfluences. Not solely or only Advisers, somewhere in that mix is Australians. Hence who are they [i]really[/i] representing here? Perhaps a large Super fund competing with Advisers? Until they gain some clarity on exactly who they represent the FPA should stick to organizing conferences and selling CFP logo’s. No doubt, we’ll soon see the first FPA Finfluencers conference, in-conjunction with TikTok of course.
The only members allowed to vote or stand for office in the FPA should be practicing advisers who are real CFPs (not grandfathered). Practicing advisers who haven’t completed real CFP Certification yet should be granted non voting associate status.
Everyone else should have no part in the FPA whatsoever. There should be absolutely no corporate memberships or corporate payment of adviser’s fees. For too long the interests of advisers have been sidetracked by hangers on and commercial interests.
CFP becoming irrelevant – as is the FPA is suspect. Your other point are spot on.
Grandfathered CFPs were always a con, and always irrelevant. But the CFP Certification subject is the highest level of educational assessment in financial planning. Higher than anything in a Masters of Financial Planning. It’s very relevant for any planner who aspires to the highest standards, and very relevant for any consumer who wants their planner to be at that level. (Yes, CFA is probably higher still, but that’s for fund managers and research analysts, not financial planners).
The reason FASEA didn’t recognise real CFPs is:
a) The FPA refuses to differentiate between real and grandfathered CFPs, and refuses to require grandfathers to upgrade to the higher standard.
b) The FASEA Board was heavily influenced by conflicted course providers whose own interests were best served by minimising RPL and forcing advisers to pay for more courses.
The CFP mark is actually owned by an international organisation. FPA is just the current Australian licensee for it. Perhaps the best solution all round is for CFP to be licensed to another organisation that will manage it better.
Let’s be clear – there are few if any grandfathered CFP professionals in the system. For people to keep complaining about them is a joke. Re the FPA Board most have to be CFP qualified BUT you also need to have broader experience and diversity on any Board to get the best possible outcomes. FPA need as well as practitioners Board members with strong corporate governance and commercial experience.
Actually there are no “grandfathered CFP professionals” at all. Unfortunately there are still quite a lot of grandfathered CFPs however. The FPA, and in particular those grandfathered CFPs who wield considerable influence over the FPA, keep trying to pretend it’s a non issue and sweep it under the carpet. However regulators and policy makers are well aware of it, and it’s one of the reasons the FPA is so ineffectual as a lobbyist. The FPA has no credibility while it persists with the grandfathered CFP hoax.
How can you suggest this? The CFP is still just a professional designation, largely in place to prop up revenue for the FPA. This is modus operandi for professional associations looking to maximise revenue and entrap members within their association. It is inferior to every single tertiary FP qualification in the country.
Yes, the grandfathered CFP certainly is inferior to every tertiary qualification. But the real CFP Certification unit is higher than tertiary standard. Everyone I have spoken to that has completed CFP Certification says it was much harder than anything in their degree.
That’s why grandfathered CFP members of the FPA should be wound back to associate member status until they complete a degree and the CFP Certification unit. (Or why management of the CFP designation should be transferred to another organisation more willing to uphold reasonable standards.)
It’s not about how hard it is, it is about whether it is a recognised qualification on the Australian Qualifications Framework. But the FPA (and basically every other professional body) don’t want the recognition because then you can’t charge an annual fee to retain it.
The FPA doesn’t charge an annual fee for the qualification. They charge it for the designation, which is a different thing. There are some planners who have completed the CFP qualification (which can never be taken away) but have chosen not to pay the FPA to retain the designation. There are also some planners who pay for the designation, without ever having completed the qualification.
As a professional I would want to achieve the highest level education based on content and difficulty, not based on bureaucratic classification. As an employer I would only want to employ someone who has achieved that level. The CFP Certification unit is the highest level of content and difficulty in financial planning.
I’m a member of the FPA and they haven’t done enough for me to justify paying them fees for 20 years to keep the CFP. The Master’s was a one off cost.
So you were a grandfathered CFP who paid fees for 20 years to masquerade under a designation you never properly qualified for? Good on you for finally having the professionalism to get properly qualified, and hand back the grandfathered CFP you never should have been given.
Yet the FPA did absolutely nothing to help this occur, typical,