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ASIC's finfluencer warning a 'wake-up call'
The corporate regulator has published an information sheet on how the law applies to social media influencers or “finfluencers” and licensees who use them.
ASIC's finfluencer warning a 'wake-up call'
The corporate regulator has published an information sheet on how the law applies to social media influencers or “finfluencers” and licensees who use them.
The new guidance outlines activities where influencers may contravene the law if they are unaware of their legal requirements, considerations they should take, and also guidance for licensees who are engaging with influencers.
“The way investors access information is changing. It is crucial that influencers who discuss financial products and services online comply with the financial services laws. If they don’t, they risk substantial penalties and put investors at risk,” ASIC commissioner Cathie Armour said.
‘ASIC monitors select online financial discussion by influencers who feature or promote financial products for misleading or deceptive representations or unlicensed advice or dealing.
“If we see harm occurring, we will take action to enforce the law.”
It comes after a survey conducted by ASIC last week found that 33 per cent of 18 to 21-year-olds follow at least one financial influencer on social media, while 64 per cent of young people said their financial behaviour has changed as a result of following an influencer.
Late last year, the chief commercial officer of advice tech provider Midwinter, Steve Davison called for “a fairer-level playing field” for advisers in competition with finfluencers.
Dr Angel Zhong of RMIT University welcomed ASIC’s news, calling it a “wake-up call” for finfluencers, particularly those who are unlicensed.
“Unverified investment advice is no different to fake news, which is frequently flagged by social media platforms that urge viewers to read with caution,” Dr Zhong said.
“Newbie investors are particularly susceptible to receiving dodgy financial advice, as the internet replaces traditional outlets like accredited financial advisers.
“With the goal of protecting the financial wellbeing of investors, especially the young and inexperienced ones, ASIC can consider conveying the messages to young investors who rely heavily on finfluencers.”
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