FAAA admits lack of data on unlicensed advice
The Financial Advice Association of Australia (FAAA) has told a Parliamentary Committee that it has yet to find a way of reliability estimating how many people are providing unlicensed financial advice.
And, in part, the problem encountered by the FAAA is how many social media channels actually need to be monitored and the lack of access to data captured by the Australian Securities and Investments Commission (ASIC).
Answering questions on notice from the Senate Economics References Committee, the FAAA said that in the time since its appearance before the committee “we have not yet found a way to reliably estimate the number of people who may be appearing to offer financial advice via social media, but are not licensed to do so”.
“As mentioned at the enquiry, there have been a number of high profile cases of unlicensed operators in these channels, and it is clear that there are many more that are not well publicised,” the FAAA said.
“It has been estimated that just over one third of Australians turn to social media / “finfluencers” for information about investing. The most popular platforms are Instagram, followed by YouTube, Facebook and TikTok.”
The FAAA answer noted that, in March 2022 ASIC issued Information sheet 269 which included specific information for social media influencers on discussing financial products and services online, and also identified a number of operators to target additional information.
“On the basis of information recently by Treasury in June 2023 related to the ASIC Funding Levy, ASIC does spend a lot of money in the unlicensed provider space (estimated at over $6m in the previous financial year),” it said.
“We do not have access to this data. However, we will continue to investigate this space as we believe it is an important and growing area of potential consumer harm.’