ASIC urged to be specific on ‘finfluencers’ overstepping

The Australia Securities and Investments Commission should use its proposed roadmap for financial product advice to make it clear to ‘finfluencers’ when they are overstepping the mark, according to major accounting group, CPA Australia.

It has told ASIC that the roadmap currently omits a critical part of the statutory definition “that financial product advice includes statement of conduct that ‘could reasonably be regarded as being intended to have such an influence’”.

“This omission is particularly concerning if the roadmap is intended to apply broadly, including to social media influencers (often known as “finfluencers”) and other informal communicators,” CPA Australia said in response to ASIC’s consultation around Regulatory Simplification.

“Including this part of the definition is essential to ensure that individuals who may not identify as financial advisers nonetheless understand when their conduct may fall within the scope of regulated advice.”

The CPA Australia response said it expected that the roadmap would reinforce a licensing obligation and suggested specific guidance for finfluencers.

“In the ‘Questions to ask before giving financial product advice’ section, ASIC should consider including a targeted prompt for finfluencers, such as: ‘Could the way you’re sharing your personal experience, such as highlighting what you bought, use, or invest in, be seen as encouraging others to do the same?’,” it said.

“This would help individuals assess whether they are indirectly suggesting or recommending financial products. Additionally, the roadmap should address how someone can determine whether they are acting as a financial adviser if they are unsure whether they are giving financial product advice,” CPA Australia said.

Elsewhere in its response, CPA Australia also canvassed allowing ASIC to issue private binding rulings in similar fashion to the Australian Taxation Office (ATO).

“We recommend that ASIC be given the power to issue written expressions of its opinion on how relevant provisions of a law it administers applies to a specific circumstance, upon a request from an entity,” it said. “These opinions should be binding on ASIC if the entity relies on them. This would be similar to ATO’s power to issue private binding rulings.”