Pressure mounts on Big Tech’s role in Shield and First Guardian

In this highly polarised political climate, perhaps the only thing voters Left and Right can agree on is that Big Tech’s social impact needs supervision, if not outright regulation.

Similarly, perhaps the only policy proposal that all combatants in the so-called Super Wars could get behind is an acknowledgement of the role played by technology providers in facilitating and accelerating access to unlicensed financial advice, scams and problematic financial products.

From a fairly innocuous if transformative technology allowing global connection and the distribution of cat videos, there is growing consensus that social media has begun to cause (or at least exacerbate) social harms, especially among children and young people.

The 2026 World Happiness Report found there is overwhelming evidence that social media is connected to severe and widespread direct harms such as “sextortion” and cyberbullying, and compelling evidence of indirect harms such as mental illness. The American Enterprise Institute – a Washington DC-based libertarian think-tank that ordinarily opposes government intervention and regulation – concludes that 94 per cent of experts agreed social media may be associated with body dissatisfaction (96.5 per cent), perfectionism (96.9 per cent), exposure to mental disorders (96.4 per cent) and sexual harassment and predation (94 per cent).

In addition to the harm caused by the social media platforms, there is growing alarm that AI may present significant (maybe even existential) threats to human safety and security, let alone social cohesion, through rogue or increasingly sentient agents, or even just sensitive and poorly monitored chat threads gone wrong.

There is a growing acknowledgement that the financial system is not immune to these social phenomena. Anecdotal evidence presented by regulators and consumer advocates in closed-door forums hosted by The Conexus Institute suggest harmful lead generation and unlicensed super-switch activity is occurring largely on social media.

That includes a number of consumers who lost large swathes of their retirement savings after being directed, encouraged or advised to invest in the potentially fraudulent and now defunct Shield and First Guardian master trusts.

Concerningly, it is believed that a number of these consumers were not even actively seeking information about their financial affairs but scrolling passively on social media at the mercy of the notorious algorithms.

In a similar vein, the corporate regulator has taken issue over recent years with so-called “finfluencers” deliberately or inadvertently providing unlicensed financial advice to followers online. But while it is right to stamp out this unregulated activity, especially when misleading or harmful to consumers, it has said little about the technology firms providing them a platform and, in some cases, paying these content creators for what is essentially illegal content.

‘Different settings’

And then there are the large language model-enabled AI conversations that may well be straying into unlicensed financial advice or harmful financial content which nobody really knows the scale of globally. But given there are more than 1 billion monthly users of OpenAI’s ChatGPT alone, it is probable that this is a significant sleeper issue.

The role played by social media in financial product lead generation was first raised by Professional Planner in a question to Minister for Financial Services Daniel Mulino following his address to the National Press Club in August, during which he laid out the government response to the Shield First Guardian incident and crackdown on lead generators.

In response, Mulino said: “We will need to look at a lot of the detail as we roll out the legislation. I expect that we may need to look at ways that we enforce those bans in different settings … If there’s activities through bots that are occurring through social media, then we will need to think through those details.”

The clarion call was picked up with gusto by AMP chief executive Blair Vernon, who writes in Tuesday’s The Australian that Big Tech must be held to account for its role in the Shield First Guardian disaster.

“Trustees, fund managers, advisers, licensees, platforms and lead generators are all being scrutinised to determine where reforms are needed and where accountability should sit,” Vernon wrote. “That is entirely appropriate. But there is one very influential link in the value chain that risks being overlooked – social media.”

The Albanese government deserves credit for its willingness to take on Silicon Valley, as it has with both its news bargaining code negotiations and its social media ban for under-16s.

It must be willing to muster similar courage when it comes to policing harmful financial content online – and avoid the kneejerk temptation to just apply more rules and red tape to the regulated parts of the financial system.