2 days ago
Major crackdown as millions warned over following this financial advice: 'Real harm'
Australians are being warned to be wary of financial advice promoted on social media. The Australian Investments and Securities Commission (ASIC) has zeroed in on 18 financial social media influencers who have been dishing out potentially dodgy advice to their thousands of supporters
Colloquially named "finfluencers", these people have racked up a massive online following from their guidance on how to become rich. But ASIC Commissioner Alan Kirkland said some of these people aren't even qualified to give financial advice.
"It's important that consumers separate fun from fact when it comes to finfluencer content. Popularity doesn't equal credibility," he said.
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"Check their credentials and whether they're licensed or authorised, before checking your money out."
ASIC has been particularly concerned with the finfluencers claiming to be stock market trading experts.
Some provide unauthorised advice that can promote "high-risk, complex investment products" that can cause "real consumer harm".They share images of themselves or other people enjoying lavish lifestyles, fast and expensive cars, and drowning in luxury goods as a result of jumping on these investment bandwagons.
Aussies can be lured away from public social media accounts and encouraged to join these finfluencers' closed online communities, which can make it harder for ASIC to track what is being said in these forums.
It's in these online groups that the finfluencers claim to give out their biggest, potentially harmful secrets.
Under Australian law, if you're not licensed, you're not legally permitted to provide financial or investment advice.
ASIC's warning notices to the more than dozen finfluencers in Australia was part of a global crackdown on the issue, with authorities from the UK, UAE, Italy, Hong Kong and Canada all taking coordinated actions against certain content creators.
They were all suspected of unlawfully promoting high-risk financial products and providing unlicensed financial advice.
Some of the actions included arrests, warning notices, website takedowns, educational schemes with authorised finfluencers, and consumer awareness programs to put unauthorised finfluencers on notice.
This is the first major local suppression on dodgy finfluencers since 2022, where ASIC gave content creators strict guidelines on how to disseminate financial advice lawfully in Australia.
Following that movement, ASIC noticed a big change.
"We saw that many finfluencers changed what they were saying or became licensed or authorised representatives to comply with the law," Kirkland said.
He added that Australian Financial Services licensees also started reaching out to finfluencers to make sure they improved their due diligence.
CPA Australia issued a similar warning last month after seeing potentially misleading tax advice from content creators.
In one instance, a finfluencer suggested you could claim expenses for your pet by telling the Australian Taxation Office (ATO) that it's a guard dog and you work from home.
'In many cases, the advice from these accounts is simply wrong. In other cases, the claims have an ounce of truth but would apply only to a very small group of workers,' CPA Australia's Jenny Wong said.
'Some finfluencers exaggerate the potential for certain claims to garner attention and likes. This is not serious advice. It should be ignored.
'Having a large following on TikTok doesn't automatically make someone an expert on a particular subject, especially one as complex as the Australian tax system.'
She said you should speak to a licensed financial advisor about tax deductions and other claims when you lodge your tax return after July 1.
