The rise of the “finfluencer” is a side effect of the recent exodus of financial planners from the profession, and it’s a trend that the TAA does not predict will slow down any time soon. However, the release of the ASIC Information Sheet (INFO 269) stands as a reminder to social media commentators to not stray the line from information into advice.
TAA CEO, Neil Macdonald, acknowledged that finfluencers do “serve a need for financial information and financial education,” especially for younger people or people who cannot necessarily afford personal financial advice, and that they “don’t actually want to see them disappear.”
“However, it’s extremely unfair that well-qualified, experienced, professional advisers have to go through so many more hoops than finfluencers to provide similar information and education,” Mr Macdonald stated.
One of the reasons that younger consumers in particular, pay attention to finfluencers is due to the typically short, sharp, and easily digestible financial information on one particular aspect of growth wealth or managing money at a time, according to Mr Macdonald.
He continued by stating the challenge facing advisers is their “heavy regulatory burdens” which hinder them in delivering similar information at an affordable price, which is a challenge that has persisted for some time.
“Finfluencers do not carry that same burden,” he noted.
He holds hope that the Quality of Advice Review (QAR) will step in to address this inequity. Mr MacDonald has also recently called for the QAR to step in and “remove adviser and licensee fear” following heavy regulation and compliance in recent years.
Additionally, Mr Macdonald said that advisers should be permitted to provide simple advice, indicating that there is an appetite for the “bite-sized advice” that finfluencers are able to provide.
“Advisers are the people best qualified and experienced to provide good-quality advice,” he continued.
“…but they have their hands tied by a range of factors including product-focused legislation, multiple regulators and licensee policies, and processes.”
Mr Macdonald also drew attention to the importance of raising consumer awareness on the difference between financial advisers and finfluencers, stating that quality advice isn’t just information, education or a product.
This is what happens when the former Govt introduces the Hayne2 Annual Fee Renewal Consent arrangements onto time poor families – unique red tape that does not exist in any nation on earth. The UK, Canada, NZ & USA all have a one-off disclosed ONGOING advice fee, which is only changed when necessary. As a result they don’t have the same problem with FinInfluencers like we do here. It’s time to totally get rid of the Annual Fee Renewal Red-tape, so that over 1 million Australians can access cost-affordable advice once again.
I wouldn’t worry about these clowns so much – the old adage and fool and his money will be soon separated. – I would worry more about the tax accountants giving advice outside the constraints of the Corps Act – funny concept = Best interests duty “Providing appropriate personal advice”
Neil should look at the root cause of much of the red tape. It is because of the practices of companies like AMP, NAB, CBA, etc that the government has put in place this crazy red tape.
You completely sure about that “root cause”? AMP and the Banks were essentially competition to Industry Super (who else could take FUM from Industry Super) but are no more – many of the old methods of selling product/advice is a thing of the past for AMP and the Banks thanks to the Red tape – and perhaps for the better. Hang on one moment – are product providers still able to charge for advice from product, deliver advice on only the in house product and if not requested by the member, not provide the advice at all?
goodness – some misdirected sour grapes here??
Given the failures of the various adviser associations over the last few years, are any of them in a position to speak for advisers? This is especially true for Neil and his team. Given the AMP’s treatment of their advisers during Neil Macdonald’s tenure at TAA, his commentary should be taken with a grain of salt.
Why are we getting commentary from Neil? He presided over the destruction of AMP financial planners and now he is giving us advice on FinFluencers? I read IFA to keep up to date on matters relating to non-aligned advisers, not to hear commentary from the big end of town.
Barefoot investor
Similar to the rise of “Financial or Money Coaches”, people providing unqualified and uneducated information in the marketplace need to be held to account by ASIC.
About time people start talking about this! Financial Influencers have their place, but bear no responsibility for their influences, which I have seen costing unassuming and uneducated consumers dearly. Advice would have avoided these catastrophes.
“However, it’s extremely unfair that well-qualified, experienced, professional advisers have to go through so many more hoops than fin-fluencers to provide similar information and education,” Mr Macdonald stated. Since when did financial advisers receive any measurable level of ‘fairness’ in how legislation has been imposed on them – dating back to day 1 in 1993? relative to every other vested interest with their fingers in the financial services pie i.e. – ISF’s, accountants, estate trustees, product providers and now fin-fluencers. That is at the very core of why advisers are leaving in droves – the extremely and significant un-level playing field!!!
This is not new…
As a financial adviser, if someone came to me and asked what super fund and investment option they should be in, I can’t just tell them Hostplus, balanced index investment option
If I took off my shoes and wrote a book, I could say I have looked into it and the best option is Hostplus, balanced index investment option
It doesn’t matter that this advice is wrong for 80% of the population though, as on page 192 he has a warning that nothing in the book is personal financial advice.
I don’t care about making it harder for finfluencers or authors, just make it easier for us. Please.
Page 192? Thats hardly concise, clear or effective…advice failed…on so many other levels as well!
Well said, Real Advisers don’t care about Finfluencers, Robo Advice etc, what we care about are massive levels of BS over the top expensive Red Tape Regs for Real Advisers and a massive ASIC & AFCA whacking stick if you get the smallest thing half wrong.
At the same time it’s the Wild West of zero regulations for Illegal AFSL Accounting Advice, Finfluencers, etc
It is so skewed against Real Advisers it’s beyond belief and so terribly detrimental to consumers.
the high fee HostPlus Balanced fund has substantially outperformed the “low” fee HostPlus Balanced Index Fund lol
It was that wat 2 years ago when I last checked too…