Australia's peak corporate regulator has issued notices to four finfluencers who it says were providing unlicensed financial advice or engaging in deceptive conduct.
Australia's peak corporate regulator has issued notices to four finfluencers who it says were providing unlicensed financial advice or engaging in deceptive conduct.
In a statement today, The Australia Securities and Investment Commission said warning notices had been issued to four social media influences who were promoting financial products, and had commenced a review of 15 Australian Financial Services licensees which had so-called finfluencers operating under their licences.
The statement said the four finfluencers who had been issued warning notices were suspected of providing unlicensed financial advice, including promoting claims of guaranteed returns.
It comes as part of the second annual Global Week of Action Against Unlawful Finfluencers, which involved 17 peak regulators across Asia, Europe, North America and the Middle East, and aimed to disrupt unlawful financial promotions.
Particularly of concern, ASIC said, was the proclivity of finfluencers to target kids.
Recent Moneysmart research showed some 63 per cent of Australians aged between 18 and 28 relied on social media for financial information, with more than half saying they somewhat or completely trust financial information from social media and finfluencers.
ASIC commissioner Alan Kirkland said the operation was done in collaboration with the 16 other nations because "finfluencers don't respect borders".
"What people see online is shaped by algorithms designed to drive click and engagement, rather than promoting accurate information," he said.
"This means the consumers are more exposed to biased or misleading content."
Mr Kirkland said the focus for ASIC in this year's investigations were finfluencers targetting 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," he 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.
"If someone on social media is promising easy money and guaranteed returns, there is a real risk they're breaking the law, and you could be the one who loses money."
Under current disclosure arrangements, 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.
"Licensees remain responsible and liable for what their representatives say and do online," Mr Kirkland said.
"We expect active supervision, not a set‑and‑forget approach."
It comes after, in February, ASIC cancelled the AFS licence of Pule Markets Pty Ltd for failing to take reasonable steps to ensure representatives comply with financial services laws.
Last year, in the first year of the program, some 18 suspected unlawful finfluencers had action taken against them.
ASIC said in its statement that following that action, many either become authorised representatives or amended their content to not include financial advice.
