The Australian Securities and Investments Commission (ASIC) have revealed it’s cracking down on misleading financial advice spread by finance influencers AKA finfluencers.
ASIC monitors online financial discussion by influencers who share “misleading or deceptive representations or unlicensed financial services.”
Offering financial services without an AFS licence is an offence under the Corporations Act 2001 (Corporations Act) and finfluencers who are in breach of these rules will cop hefty penalties.
A 2021 ASIC survey suggested 33% of 18 to 21-year-olds follow financial influencers on social media. It also found that 64% of those young Aussies changed a financial behaviour based on the advice from an influencer.
ASIC commissioner Cathie Armour told BBC it was crucial that “influencers who discuss financial products and services online comply with the financial services laws. If they don’t, they risk substantial penalties and put investors at risk”.
One such “substantial penalty” includes up to five years in jail for an individual and financial penalties into the millions of dollars for a corporation, according to a new information sheet.
The sheet advises finfluencers that when they discuss financial products and services online or promote affiliate links, they must ensure the following:
- “You are providing financial product advice or arranging for your followers to deal in a financial product. If you carry on a business of providing financial services, you must hold an AFS licence (unless you are exempt or are authorised to provide those services as a representative of another person who holds an AFS licence). Otherwise, you may be in breach of the licensing requirements under the law.”
- “Your content is accurate and balanced. If your online post is misleading, you may be breaking the law.”
- “Seek legal advice if you are unsure of your obligations.”
It follows the mass crackdown on influencers who promote prods on their ‘grams without making it clear they’re being paid to crow about the brand.
If you’re a finfluencer and would like to make sure you avoid copping mad fines or fkn jailtime, suss ASIC’s info sheet for more.