The Australian Securities and Investments Commission (ASIC) has issued warning notices to finfluencers suspected of providing unlicensed financial advice and commenced reviews of firms supervising those operating under their licence.
The corporate watchdog stated it has issued the notices to four finfluencers who it believed were acting without a licence or were engaging in misleading or deceptive conduct, with the notices addressing concerns about the promotion of claims of guaranteed returns. Additionally, ASIC was looking at three Australian financial services (AFS) licensees regarding their supervision of 15 finfluencers.
It stated its actions are part of a global effort to crack down on “unlawful social media finfluencers” and was taken in conjunction with 16 other global regulators concerned about the influence of online financial information and how they could disrupt unlawful promotion before consumers suffered financial harm.
According to research carried out by Moneysmart, 63 per cent of Australians aged 18 to 28 rely on social media for financial information, with more than 50 per cent stating they somewhat or completely trust financial information on social media and from finfluencers.
ASIC also reminded licensees that engage finfluencers that while unlicensed people may operate as authorised representatives of an AFS licensee, they were responsible for supervising their conduct and the liability for any breaches remained with the licensee.
Referencing the action taken alongside regulators in in Belgium, Brazil, Canada, Denmark, Hong Kong, India, Ireland, New Zealand, Norway, Qatar, Singapore, the United Arab Emirates and the United Kingdom, ASIC commissioner Alan Kirkland said: “Unlawful finfluencer activity doesn’t respect borders, which is why regulators are taking strong action together for a second year in a row.
“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.
“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.
“If someone on social media is promising easy money or guaranteed returns, there is a real risk they’re breaking the law and you could be the one who loses money.”