‘Advisers have one hand tied behind their back’ in competition against finfluencers

While discussing the topic of the accessibility of advice on a new episode of the ifa Show, Midwinter’s Steve Davison said it is very easy to get financial information “that borderlines advice these days” through channels like Instagram, TikTok and Reddit.

“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.

“It feels like advisers have one hand tied behind their back... I think it’s bigger than just the regulators. And it’s great to see Treasury now taking a look at the affordability of advice as really accessibility of advice.

“I think it would be great to see what some of those findings are, and hopefully, they do start to face into improving productivity and accessibility of advice.”

Last month, financial services minister Jane Hume slammed an ASIC review into financial influencers as the equivalent to creating a nanny state.

During a standing committee meeting on economics last month, ASIC confirmed it is engaging with social media platforms and their moderators to understand how the financial services law applies to their activity.

According to the regulator’s research to date, the number of online finfluencers across platforms such as Facebook, Reddit, Instagram, YouTube and TikTok is clearly growing.

“Increased levels of retail investor participation and interest in investment is to be encouraged, but we want this to occur in an informed, safe and sustainable way. This contributes to market integrity and confidence for all investors,” the corporate regulator said.

Listen to the full ifa Show episode with Mr Davison here.

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.