Speaking at the AFA Evolve Conference, financial services minister Jane Hume reiterated her now-infamous view that finfluencers are just the latest iteration in a long line of consumers sharing views about financial markets, not unlike “taxi drivers giving stock tips”.
Playing down their significance on Tuesday, the minister argued against government intervention, noting that the real threat to advise comes from fraudulent members of the industry.
“Earlier this year, I made a comment about TikTok finance influencers or finfluencers, and I made it very clear, if they’re not authorised and registered, they are not financial advisers. They’re the equivalent of a taxi driver giving stock tips,” Ms Hume said.
“It goes without saying that if you make a financial decision that goes drastically wrong based on the musing of a taxi driver or a guy down at the pub or a 16-year-old on TikTok, it shouldn’t be up to the government or indeed the industry to bail you out.
“I stand by that because I am a Liberal; as a Liberal, we don’t believe in establishing unworkable rail guards that inhibit progress and innovation. I have absolutely no interest in perpetuating a nanny state culture, where we resort to banning things to save people from their own follies.”
Instead, she said it is essential that consumers have access to the right information from good financial advisers, before segueing into the cruciality of tough regulation in the advice industry.
Referencing pre-Hayne behaviour that perpetrated ongoing reputational damage to the industry, Ms Hume underlined that unlike finfluencers, it is unauthorised advisers that “undermine the financial adviser brand”.
“This market failure is really what the Financial Adviser Standards attempts to resolve,” she said.
“They signal to the consumer that if you come to me as an authorised, registered financial adviser on a publicly available register that my advice to you will be in your best interest… I am obliged to provide certain disclosures to you, I’ve passed an exam, I fulfilled specific education requirements and I can’t accept commissions or remunerations which would conflict with the duty I have to advise you.
“That’s why unauthorised advisers are the biggest risk to this industry.”
Earlier this year, survey results by MLC revealed that as many as 13 per cent of Aussies aged between 18 and 34 are regularly using platforms such as TikTok, Facebook and Instagram as a financial resource.
And while Ms Hume maintains her lukewarm view of finfluencers, RMIT University expert Dr Angel Zhong told ifa sister brand nestegg earlier this year that unmoderated investment advice provided in social media platforms could lead to herding behaviour in financial markets.
Calling for explicit measures warning vulnerable viewers about the reliability of financial advice on social media, Dr Zhong said “unverified investment advice is no different to fake news, which is frequently flagged by social media platforms that urge viewers to read with caution”.
She is so out of her depth it is not funny. Her quote which I read whilst waiting for the 60 page SOA to print.
“I stand by that because I am a Liberal; as a Liberal, we don’t believe in establishing unworkable rail guards that inhibit progress and innovation. I have absolutely no interest in perpetuating a nanny state culture, where we resort to banning things to save people from their own follies.”
I don’t trust the ALP but they can’t be worse than this woman.
She should at least arrange for the TikTokers to pay their share of the ASIC levy, given all the headaches they’ll shortly be causing for the regulator.
Lets see. An UNLICENCED influencer asks is your life insurance “too expensive”? Then proceeds to nominate an insurer that is offering a HUGE discount up front. Fails to specify the HUGE premium kick in the teeth down the track. Minister Hume does not see a problem. FASEA does not apply to these SCUM! I GIVE UP !
I pretty sure she uses TikTok in the place of Ministerial Advisers! Hopefully it will be a case of TikTok goes the clock and Jane will be replaced by somebody with greater credibility.
Can the minister point to an example of an innovative financial product coming out of tik tok? Everything I have seen is flogging crypto or share trading software, in most cases from conflicted parties aiming to take advantage of others. Just admit you are too lazy or incompetent to do anything about non licensed advice, and start working on removing the red tape for those actually following the over the top regulations.
[i]Referencing pre-Hayne behaviour that perpetrated ongoing reputational damage to the industry, Ms Hume underlined that unlike finfluencers, it is unauthorised advisers that “undermine the financial adviser brand”.[/i][b][/b]
So … at what point do finfluencers become unauthorised advisers?
I generally agree with minister Hume’s comments. The difference between a financial adviser and a taxi driver giving advice is that the adviser is ‘typically’ remunerated from the product manufacturer (in one way or another). As long as Tik-tok advisers are not receiving any marketing payments from the product providers they are influencing clients to invest in, I cannot see how it is different to someone at a barbecue proving their own uneducated opinion (just to a bigger audience). Different story if the tik-tok advisers are receiving marketing fees, in which case the product provider should carry the responsibility of ensuring the advice is legal. What actual advice are they giving and is anyone actually following their advice?
There are so many issues with them not being regulated. Grateful to see how you would manage these two hypotheticals:
A Finfluencer puts out a video saying a particular stock is really good, people should buy it. What they don’t say is that they have already bought it and plan on selling it when the price goes up 20%. Is this OK? If not, how will ASIC ever find out if they aren’t regulated?
A Finfluencer puts out a video saying a particular managed fund is great. What they aren’t telling their 50,000 followers is they are being paid by the fund manager to advertise it. Is this OK? If not, how will ASIC ever find out if they aren’t regulated?
Get with it MC – many Finfluencers on social media ARE being rewarded from a range of sources including product manufacturers. BOMB waiting to go off, so well done Jane Hume!!
Wow. This would have to be one of the most inaccurate, ill informed, comments on this issue I have ever seen. Are you one of Hume’s ministerial advisers MC?
Sadly these finfluencers are being remunerated so the law should be applied
Plus it will stop Hume going to where she gets her advice from.
So she says “That’s why unauthorised advisers are the biggest risk to this industry” however will do nothing to regulate them and allow them to provide advice on whatever they want. Whilst at the same time increasing the regulatory burden and education requirements for licensed financial advisers which in turn increases the costs which are passed on to the client forcing them to turn to unlicensed advice? Does she even think before she speaks. If she had just said “its too hard to regulate all these Tik Tok/facebook/instagram advisers” at least we would understand.
It definitely time to stop calling yourself a financial adviser and jumping through all those hoops (unless you are dealing with HWN people) and just start becoming a tik toker. Charge the client directly for your services and do whatever you want without any fear of retrubition from ASIC (Australian Serurities Incompetent Commission)
Jane Hume for PM of any nanny state!
Pretty obvious the Taxi Adviser is not a licensed Adviser…even says Taxi on the car…..not so when you get advice from the ” fin..influencer” giving advice (yes financial advice under the Corps act definition) on Insta or Tik Tok.
Also missing the point that the taxi driver is speaking to 2 or 3 people, whereas the finfluencer could be speaking to 2 or 3 hundred thousand people.
Ms Hume, Odwyer, Frydenberg & ASIC, you have created the most absurd NANNY STATE over Real Advisers.
Yet somehow you say you won’t do that.
Utter rubbish, lies and more Lies !!!!
When will this Government realize it just doesn’t understand what Financial Advice is all about? They keep trying to fix something they do not comprehend and just continue to destroy. They are killing good people and closing good businesses with compliance overload – pity the clients who will suffer! The new DDO rules – what is significant – well that is up to you or what you feel may be or not? When is advice not advice but if you ask questions to ensure it is reasonable it is advice even though it isn’t? Really???? This has to stop.
How can she say this with a straight face?
“as a Liberal, we don’t believe in establishing unworkable rail guards that inhibit progress and innovation. I have absolutely no interest in perpetuating a nanny state culture,”
*SIGNS UP FOR TIKTOK*
So it’s OK to have a nanny state with unworkable rail guards for professional advisers, but there’s no need to protect consumers against unqualified con artists?
Hume has lost the plot. This pronouncement must mark the point at which she has officially become worse than O’Dwyer. It was a very low bar, but Hume has somehow managed to squirm under it.
You want members to pay to listen to this claptrap, pay to listen to alreay overpaid public servants
senators and heads of government departments speak. Waste of time and money. I will never, ever pay for a conference as long as these people are there.
“it is unauthorised advisers that “undermine the financial adviser brand”. “This market failure is really what the Financial Adviser Standards attempts to resolve.”
Sorry Jane, it might be what FASEA attempts to resolve, but it doesn’t. Instead, it just makes it so much more difficult and costly for the actual advisers you are trying to protect.
““I stand by that because I am a Liberal, as a Liberal we don’t believe in establishing unworkable rail guards that inhibit progress and innovation. I have absolutely no interest in perpetuating a nanny state culture, where we resort to banning things to save people from their own follies,”
What utter BS.