The Australian Securities and Investments Commission is expanding its crackdown on finfluencers to include those operating as authorised representatives of Australian financial services licensees.
ASIC said on Friday that it had issued warning notices to four finfluencers it suspects of providing unlicensed financial advice, and has kicked off a supervisory review of 15 others operating under AFSLs.
Its review of 15 AFSL-authorised finfluencers signals that the regulator is not confining its scrutiny to only unlicensed operators. Licensees that authorise finfluencers and fail to monitor what they say risk breaching the Corporations Act.
As part of a second Global Week of Action Against Unlawful Finfluencers involving 17 regulators across 13 jurisdictions, ASIC has reminded licensees of their obligations to supervise finfluencers they authorise.
The current action, coordinated with regulators from Belgium, Brazil, Canada, Denmark, Hong Kong, India, Ireland, Norway, Qatar, Singapore and the UAE, focuses on finfluencers suspected of promoting high-risk products “including promoting claims of guaranteed returns, which may also be misleading or deceptive”.
ASIC Commissioner Alan Kirkland said in a media release that the regulatory crackdown has been co-ordinated globally because “unlawful finfluencer activity doesn’t respect borders”.
“What people see online is shaped by algorithms designed to drive clicks and engagement, rather than promoting accurate information,” he said.
“This means consumers are more exposed to biased or misleading content.”
During last year’s global week of action, ASIC issued warning notices to 18 finfluencers, and Kirkland said it was important for consumers to be able to “separate fun from fact”.
“Popularity doesn’t equal credibility. Check their credentials and whether they’re licensed or authorised, before checking your money out,” Kirkland said then.
On the radar
Finfluencers have been on the regulator’s radar for at least the past four years as the popularity of social media escalates unabated and as unscrupulous operators are attracted to the potential targets social media can provide.
ASIC said on Friday that research conducted through the Moneysmart website shows 63 per cent of Australians aged 18 to 28 rely on social media for financial information, and more than half say they at least somewhat trust what finfluencers tell them.
In March 2022 then-ASIC executive director for markets Greg Yanco told Professional Planner that finfluencers intending to use social media to generate an income stream should obtain a licence or be authorised by a licensee, and that adding disclaimers such as “this is not financial advice” or “do your own research” does not absolve an unlicensed person of responsibility.
“If it’s influencing people, you’re going to need a licence even if you’re not being paid,” Yanco said.
The profession has taken its own steps to counter the problem. In November 2024, the Financial Advice Association Australia launched a digital campaign across Facebook, Instagram, LinkedIn and YouTube, designed to steer consumers away from unlicensed and unauthorised finfluencers and towards licensed advisers.
FAAA chief executive Sarah Abood said the aim was to ensure the association was present where finfluencers operate and to counter the potentially damaging and misleading messages consumers receive.
“I want to be there where those influencers are… putting the other point of view, not just letting them have the field and talking about how they can make you rich in 20 days,” Abood told FAAA members in a webinar.
Last year’s week of action coincided with four people pleading guilty to charges of conspiracy to commit market rigging in connection with a coordinated pump-and-dump scheme run through a Telegram group called “ASX Pump and Dump Group”.
The scheme ran for three weeks in August and September 2021 and involved nine announcements designed to inflate prices of chosen stocks before they sold at the elevated price.
All four faced a maximum penalty of 15 years’ imprisonment and a fine of more than $1 million, but were sentenced to intensive correction orders for terms ranging from 14 months to two years.
