ASIC cracks down on ‘finfluencers’
The Australian Securities and Investments Commission (ASIC) has cracked down on media “finfluencers” announcing it has sent warning notices to 18 people for unlawfully promoting high risk financial products and providing unlicensed advice.
ASIC said that it had undertaken the crackdown as part of a joint approach by regulators from the UK, UAE, Italy, Hong Kong and Canada.
Together, the nine regulators used a combination of regulatory and enforcement powers including arrests, warning notices, website takedowns, educational schemes with authorised finfluencers and consumer awareness programs to put unauthorised finfluencers on notice and warn consumers of the risks of unauthorised and misleading finfluencer content.
Commenting on the move, ASIC Commissioner Alan Kirkland said regulators across the world had joined forces to disrupt unlawful finfluencer activity.
“It’s important that consumers separate fun from fact when it comes to finfluencer content. Popularity doesn’t equal credibility. Check their credentials and whether they’re licensed or authorised, before checking your money out,” he said.
ASIC’s current concerns lie with finfluencers positioning themselves as so-called trading experts, who are providing unauthorised financial product advice and promoting high-risk, complex investment products that can cause real consumer harm, such as contracts for difference (CFDs) and over the counter (OTC) derivative products.
The regulator said their social media content is often accompanied by misleading or deceptive representations about the prospects of success from the products or trading strategies they promote, sharing images of lavish lifestyles, sportscars and other luxury goods.
“We are seeing a pattern where these unlicensed finfluencers invite consumers to join their closed communities or forums to learn their secrets to success or copy their trades,” Kirkland said.
So the person with no license to give advice gets a nicely worded warning. ASIC only seems to be serious about punishing people when it is a licensed adviser. On that if ASIC is looking to chase some more headlines how about they shadow shop a handful of accountants and report back.
even then, the licensed rouge adviser just magically morphs into something else and every other honest adviser picks up the tab!
They need to seriously crack down on property “gurus” who get people to set up SMSF and buy highly leveraged overpriced properties
Jane Hume was all for promoting Finfluencers over real advisers.
How does Canberra get it so wrong soooooooooo often ?
ASIC is largely responsible for the proliferation of finfluencers. ASIC has consistently persecuted and vilified licensed advisers, and effectively nudged consumers towards finfluencers instead.
This “too little, too late” action from ASIC is all about ASIC trying to protect itself from compensation claims by consumers harmed by finfluencers. All consumers harmed by finfluencers should be speaking to their lawyers about the role ASIC played in discouraging them from using a licensed adviser.