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.’
There is an easy way to start. Go to the ATO and ask how many new SMSF have been setup since X Date and who set them up. Then follow this to the accountants, property spruikers and those super performance comparison adverts.
It is not everyone, but it is a good place to start!
You forgot to mention every accountant that had a limited licence and then gave them up, as it was to costly and they didn’t beleive how much paperwork was required to give advice, it was so much easier to not be licenced and just keep doing what they have always done.
I know of a certain accountant that still promotes on their website they provide financial advice when they don’t have a licence
Oh come on Advisers, you should all know that Accountants are like Industry Super Funds and exempt from AFSL Laws.
ASIC has NEVER ONCE BUST 1 SINGLE ACCOUNTANT FOR THE BUCKET LOADS OF ILLEGAL AFSL ADVICE ACCOUNTANTS PROVIDE.
And as noted Accountants have dumped the limited AFSL’s on mass, they couldn’t believe the mind-numbing BS mass over compliance, useless SoA paper work, ASIC Levies, AFSL Fees, AFCA membership and Fees, FARSEA additional education, etc, etc.
Far easier for Accountants to continue on unlicensed with zero threat from ASIC.
Why is it the job of the FAAA to find unlicensed advice? Surely that is ASIC’s job?
Start with SMSF accountants, look specifically at new funds set up.