Australia’s financial watchdog is cracking down on social media “finfluencers” passing out dubious financial advice to people online.
The Australian Securities and Investments Commission (ASIC) has already issued warning notices to four such influencers who are suspected of providing unlicensed financial advice, or engaging in misleading or deceptive conduct.
The watchdog suspects the advice provided by the four included promoted claims of “guaranteed returns”.
ASIC is also surveying a number of financial services, who between them, have 15 finfluencers operating under their licences.
It’s part of an international effort involving 17 national regulators across multiple continents.
Recent Moneysmart research showed that 63 per cent of Gen Z Australians (aged 18 to 28) rely on social media for financial information, with more than half saying they somewhat or completely trust financial information on social media (56 per cent) and from finfluencers (52 per cent).
“Unlawful finfluencer activity doesn’t respect borders, which is why regulators are taking strong action together for a second year in a row,” ASIC commissioner Alan Kirkland said.
“What people see online is shaped by algorithms designed to drive clicks and engagement, rather than promoting accurate information. This means consumers are more exposed to biased or misleading content.”
ASIC is focusing on finfluencers who target Australian investors and who discuss a range of financial products, including leveraged derivatives, shares, and exchange-traded funds.
“Finfluencers must either hold an AFS licence or operate as an authorised representative to legally provide financial product advice or arrange for their followers to deal in financial products,” Kirkland said.
“When viewing financial content on social media, we urge Australians to check a creator’s credentials, and sense‑check the information before acting on it.”
This particularly applied to any promises of “easy money” or “guaranteed returns”, which Kirkland said could be illegal.
Providing unlicensed financial advice is punishable in Australia by five years in prison or a $1 million fine.
Under current arrangements in place since 2022, unlicensed finfluencers may operate as authorised representatives of AFS licensees, however ,responsibility for supervising finfluencer conduct and the liability for any breaches remains with the licensee.
ASIC also expects licensees to have documented arrangements for supervision, and records of it being carried out.
“Licensees remain responsible and liable for what their representatives say and do online,” Kirkland said.
“We expect active supervision, not a set‑and‑forget approach.”
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