Is advice the new tobacco?

Based on an ASIC survey from March this year, 63 per cent of Gen Z Australians use social media for financial guidance – and 56 per cent either “somewhat” or “completely” trust information from these channels. 

At the time, ASIC commissioner Alan Kirkland cautioned younger investors against relying on social media for financial decision-making, noting that the information one typically gets from these sources is “shaped by algorithms that are designed to drive clicks and views rather than providing accurate information.”

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He added: “Financial information on social media and accessed through AI tools can be incomplete, promotional or misleading. Relying on it alone increases the risk of making a decision you may later regret.”  

Last Friday, though, Kirkland was a little more conciliatory about the prospect; he told members of the Senate Economics Legislation Committee that ASIC needed to “acknowledge the reality” of social media’s role in financial education for younger people.  

“Of course [they’re] turning to social media for information about financial topics, just as they do for a range of other topics. And of course they’re turning to [AI], too. As a regulator with a role in financial education and literacy, we have to acknowledge that,” he said. 

The question, then, is why: beyond ease-of-use and familiarity, is there any particular reason why the younger Australians ASIC surveyed preferred social media over, say, regulated sources of financial information?  

Per Senator Claire Chandler’s hypothesis, it’s because they can’t afford financial advice – or, to be more precise, because advisers can’t afford to serve them.  

Speaking at the same Senate Committee hearing, Chandler highlighted some of the regulatory overheads for advice businesses over the past nine months, beginning with the $1,295 Compensation Scheme of Last Resort (CSLR) levy in September 2025. She then listed the $2,398 ASIC levy from March 2026 and the $665 CSLR special levy (plus $1,312 base levy for FY27) announced in May.  

“That’s thousands of dollars per adviser before they’ve had to account for rent, wages, insurance, technology and CPD,” she said.

“Has ASIC modelled how these levies affect the cost of advice and access to advice, particularly for young Australians?” 

According to Kirkland, ASIC has yet to undertake such a project. He did note, however, that ASIC has very little discretion over the CSLR’s costs, saying that “we [just] oversee the operations of the CSLR operator and issue the invoices.”

Chandler then drew a parallel between advice affordability and cigarettes, asking, “Do we have a concern that we might in effect end up doing what we did with illicit tobacco and making the act of pursuing the regulated route so expensive that we end up pushing people into unregulated forms of getting advice?” 

For reference, a December 2025 report from the Illicit Tobacco and E-cigarette Commissioner found that the illicit tobacco market comprised 55 per cent of the total tobacco market in Australia and was valued at around $5.6 billion.  

Research from the Australian Bureau of Statistics, released last week, found that household spending on legal tobacco has “almost halved” since 2020; this (along with the commensurate increase in illicit tobacco consumption) was partly attributed to the fact that prices for legal tobacco products have “almost tripled” since 2016.  

While research on the carcinogenic effects of regulated financial advice versus social-media sourced information is comparatively scant, Chandler’s analogy certainly makes sense from an affordability perspective.  

Per the 2025 Australian Financial Advice Landscape report from Adviser Ratings, the median advice fee has increased by 87 per cent, to $4688, since 2019.  

Meanwhile, separate Adviser Ratings research from earlier in 2025 suggests that 67 per cent of unadvised Australians wouldn’t be willing to pay more than $500 per annum for advice. So, if finfluencers on TikTok could be considered the financial education equivalent of a pack of bootleg Ice Blasts, it’s clear why the market has exploded.  

That’s only half the story, though, because unlike cigarettes, the advice profession is facing serious supply constraints. And, according to Senator Chandler, the levies she mentioned might have something to do with it.  

She asked Kirkland whether ASIC had undertaken any modelling to understand whether the CSLR and ASIC levies had any impact on the number of advisers choosing to leave the profession.  

Kirkland said they hadn’t, but that it was an area “we have taken interest in.”

“There have obviously been a range of reforms that have kicked in in recent times, including some of the education and qualification requirements and the requirement for those to be registered on our register,” he said.  

“There was a lot of concern as to whether that would result in a decline in the number of advisers, and I think it’s probably fair to say that the number of advisers is holding relatively steady. As at 30 April 2026, it was 15,152, compared to 15,435 as at 30 June 2024.” 

This framing is somewhat misleading, however, since the education and professional standards legislation Kirkland was referring to commenced in 2020. And back then, there were more than 20,000 advisers on ASIC’s register. Before the first full-year ASIC levy was issued in 2019, there were more than 26,000.  

Correlation isn’t causation, obviously. But when all you have is a hammer, everything looks like a dart.