Addressing the Millennial-targeted MarketLit Investment Conference on Friday, ASIC senior manager of retail complex products and investor protection, Somer Taylor, said the ecosystem of financial influencers online was “ever evolving” and presented challenges for the regulator.
“There’s a fragmented nature when we’re talking about social media and the internet, there’s the scale of information that we have to monitor, there’s ease of access to that information and the rapid churn rate – these are all factors that make it a complex environment for us,” Ms Taylor said.
She added that social media could be an appropriate source of “background information” for younger investors, but that it presented “a degree of risk” if financial influencers were being relied upon for investment advice.
“Use your judgement and think about risks like the fact that advice on social media may not be licensed, you might be getting information on something that is inaccurate,” Ms Taylor said.
“Those providing it might have interests in the advice, they might be promoting a certain product so that’s something to bear in mind.
“We’re seeing a range of trading structures being targeted at [the Millennial] demographic, so we would encourage people to … take the time to understand what the product is, what its risk profile looks like and what it means for you and your risk tolerance within that.”
Following the volatility caused by the GameStop trading saga in the US earlier in 2021, Ms Taylor said ASIC was paying particular attention to financial influencers’ involvement in “pump and dump activity” in markets, as well as monitoring for unlicensed advice and deceptive statements as part of social media promotions.
“In terms of fundamentals, it’s whether we are talking about people providing a financial service – if that’s the case, you need to have an AFSL,” Ms Taylor said.
“Secondly, are there deceptive statements in that information, and thirdly market manipulation – we are seeing more in terms of pump and dump activity [or] momentum trading, and we need to be really cognisant of that. If there’s a deliberate attempt to interfere with the fair operation of a market, ASIC will want to investigate.”
How about influencers like the Whittakers, Barefoots and Kochies who respond directly to people’s letters/emails/posts with advice or recommendations about what they should do in specific circumstances? They’re not licensed either. Seriously, they’re not.
So people should use their judgment online, but should completely abrogate themselves of judgment and personal responsibility the moment they step into a licenced financial adviser’s office? Got it.
That’s rather well put. Appears so.
Surprised Advisers aren’t forced by ASIC to also pay to clean up Internet Advice.
Oh, it’s coming…
Why cant ASIC just charge every single facebook/tick tok/whatever platform user a small fee to police them, a levy if you like? They put it onto us pretty easily
Pretty sure if you hit like on the 16 year old good looking skateboarder the Algorithm keeps showing you more of the same….SO Sorry ASIC FAIL….the Instagram/ Tik Tok/ Google/Facebook algorithm actually does the work for you…you don’t even need to go looking for criminals.. someone tell ASIC to google “new fridges” and wait for the Harvey Norman add to appear……Like a Post and these Social Media platforms are designed to show you more of the same…you could also make it easier for Australians to get advice rather then being drawn to Insta.. Don’t know what’s so hard especially since you’ve got less Advisers to go after and FASEA is doing your job.
Yes, what ASIC doesn’t say is the fascinating part.
They don’t say “Use a licensed adviser instead.”
They don’t say “We support financial advisers providing ongoing financial advice.” They only say words to the effect of “Use a financial adviser at important junctures for one-off advisers.”
They don’t say “Use a licensed insurance adviser.”
“we have to monitor”
– yet we’re not doing.
Ladies and gentlemen, ASIC have admitted that they are charging us a fee for no service.
Astounding. ASIC can’t even mention that consumers should maybe consult with a financial adviser. Shows what they think of us……. Opps, got to go. I have to send my SOA to some super fund employee to determine if I should be paid or not.
It is simply beyond outrageous. Completely unconscionable.
A direct quote from a recent newsletter from The Barefoot Investor:
“Put $25,000 in the Vanguard Australian Shares Index ETF (ASX code: VAS). Or, if she prefers a greener option, the Vanguard Ethically Conscious Australian Shares ETF (ASX code: VETH).
Then put $25,000 in the Vanguard MSCI Index International Shares ETF (ASX code: VGS). Or, again, if she wants a sustainable option, try the Vanguard Ethically Conscious International Shares Index ETF (ASX code: VESG).”
Nah, that’s not financial advice…
Apparently it’s easier and less risky to give unlicensed advice than licensed. More financially rewarding also to the provider of advice as their overheads are essentially $0.
I am laughing tears of sadness right now.
A leopard does not change it’s spots.
So we literally get warned that a flippant comment by a financial adviser at a barbeque is going to be considered advice by ASIC, yet people literally sprouting investment advice and product advice on social media is buyer beware. I certainly know which is likely to influence and cost more people and in a larger degree.
Social influencers are literally promoting conflict of interest.
ASIC is simply not fit for purpose.
It seems I could provide more advice and make more money if I’m simply to drop ‘Financial Planner’ from my qualifications.
I can see a lot of people choosing to get their financial and medical advice from Facebook and it’s kin going forward simply because the regulators are incompetent at their jobs.
SO…. After readng this. Would it not be better (for the adviser) to cancel the AFSL and provide “advice or factual information” online and charge clients directly from their bank accounts for the “advice” given?
No SOA, licensing fees, ASIC fees, rpofessional indemnity insurance, compliance etc.
As we know, the only people who ASIC ever pursue are licensed financial planners. Everyone else can do whatever they want with no fear of retribution at all.
…and if they get caught they will be named as a “Financial Adviser” so spruiker Con Artists are still in the clear with their reputations in tact….or so it would appear.
The Barefoot investor. It is absolutely ridiculous.
I recommend to invest in hostplus index balance fund who I have worked for in the past but now i have a book wonder if hostplus probably own the company that published the book in the first place… never been a licence adviser not even on the FAR… just running around with a general
In short, ASIC is too lazy and incompetent to police unlicensed advice. So everyone gets a green light. However if a licensed adviser provides a FSCG one day late you lose your livelihood. Sounds fair.
ASIC says ” investors should use their own judgement when it comes to financial advice on social media”.
But at the same time ASIC says to Super Fund Trustees and Investment Wrap platforms – DO NOT TRUST ADVISERS, check their SoA’s, check their clients Fee Consent multiple times.
ASIC says it will not regulate Online Advice but will OVER REGULATE Real Advisers.
What a stuffed up world ASIC make us live in.
I’m renaming my company “Social Media”…Pty Ltd
Use your judgement – consult a qualified financial adviser !