Australia's corporate watchdog, the Australian Securities and Investments Commission (ASIC), has announced a major crackdown on social media influencers who provide financial advice without holding the required Australian Financial Services (AFS) licence. The regulator is concerned about the growing number of unlicensed 'finfluencers' offering stock tips, investment strategies, and cryptocurrency recommendations to their followers, often without disclosing conflicts of interest or the risks involved.
Regulatory Concerns
ASIC Deputy Chair Sarah Court stated that the regulator is 'increasingly concerned' about the proliferation of financial advice being dispensed on platforms such as TikTok, Instagram, and YouTube. 'Many of these influencers are not licensed and their advice may be misleading or inappropriate for their audience,' she said. 'We are taking action to protect consumers from harm.'
The crackdown follows a series of investigations into social media personalities who have been promoting financial products and services without the necessary compliance. ASIC has already issued several infringement notices and is pursuing legal action against repeat offenders.
Enforcement Actions
ASIC has outlined a three-pronged approach to tackling the issue: education, surveillance, and enforcement. The regulator will ramp up its monitoring of social media platforms, using data analytics to identify potential breaches. It will also work with platform providers to remove content that violates financial services laws. Additionally, ASIC will launch a public awareness campaign to educate consumers about the risks of following unlicensed financial advice online.
'We want people to understand that if someone is giving you financial advice on social media, you should check whether they are licensed,' Ms. Court said. 'If they are not, they may be breaking the law.'
Industry Reaction
The financial services industry has largely welcomed the crackdown. Financial Planning Association of Australia CEO Sarah Abood said the move was 'long overdue' and would help level the playing field for licensed professionals. 'It's unfair that unlicensed influencers can give advice without the same regulatory obligations as qualified financial planners,' she said.
However, some consumer advocates have raised concerns about the potential for overreach. 'While we support efforts to protect consumers, we need to ensure that legitimate financial education and commentary are not caught up in the net,' said Consumer Action Law Centre spokesperson Gerard Brody.
Social media influencers have also reacted, with some claiming that they are simply sharing personal opinions and not providing advice. But ASIC has made it clear that the line between opinion and advice is often blurred, and that influencers must be aware of their legal obligations.
What This Means for Consumers
For everyday Australians, the crackdown serves as a reminder to be cautious about financial information found on social media. ASIC recommends that consumers only act on financial advice from licensed professionals and to verify credentials using the ASIC Connect register. The regulator also encourages people to report any suspicious activity to its hotline.
As the digital landscape continues to evolve, ASIC says it will remain vigilant and adapt its regulatory approach to protect consumers from harm.
