The Financial Planning Association has praised ASIC’s steps to combat finfluencers, expecting the move will quash concerns of a “two tier” regulatory approach.
ASIC executive director for markets Greg Yanco told Professional Planner in March that finfluencers caught flouting financial services laws could face prison or hefty fines.
FPA chief executive Sarah Abood said it is encouraging to see ASIC providing clear guidance on what is legally allowed when discussing financial products and services online.
“ASIC is reminding finfluencers that the law does apply to them and warning them that ASIC will take legal action if necessary,” she stated in a media release.
“The FPA has long been concerned about an apparent ‘two tier’ approach to the regulation of financial advice, where social influencers operating online seem to be treated differently to financial planners.”
Abood pointed to the high level of regulatory oversight advisers are under, which helps consumer confidence.
“None of these protections apply where finfluencers are concerned. Finfluencers can definitely play a role in improving financial literacy and confidence among consumers, and they are often very effective at providing that information in an engaging way online.”
Abood said they are not legally able to give personal or general advice on financial products and there is no accountability if something goes wrong.
“Australians should only act on the advice of qualified, professional financial planners who are complying with a code of ethics to provide advice in your best interests, where there are consumer protections, regulators are supervising them and they are providing support and assistance for clients.”
Full arm of the law
The corporate regulator released an information paper in March highlighting examples of what is and isn’t acceptable for unlicensed finfluencers to say.
General financial tips, like budgeting, are allowed but complex personalised advice and product recommendations will raise ASIC’s ire.
“Starting to receive money for the information [or] the advice you’re providing is a clue that you might need to start getting a licence,” Yanco said, noting that receiving money isn’t the only factor the regulator will consider. “If it’s influencing people you’re going to need a licence even if you’re not being paid.”