The Australian Securities and Investments Commission has published an information sheet for 'finfluencers' (financial influencers), discussing how the law applies when discussing financial products and services.
This comes off the back of the 2021 ASIC Young People and Money survey, which revealed that 33% of 18 to 21 year olds follow at least one financial influencer on social media.
An additional 64% of young people said they changed at least one of their financial behaviours because of a 'finfluencer'.
In mid-2021 TikTok banned 'fintok', referring to influencers promoting financial services and products.
ASIC Commissioner Cathie Armour said the way investors access financial information is changing.
"It is crucial that influencers who discuss financial products and services online comply with the financial services laws," Ms Armour said.
"If they don’t, they risk substantial penalties and put investors at risk."
John Winters, CEO and co-founder of share trading platform Superhero, said ASIC's new guidance will further ensure that Australians have access to reliable and accurate financial advice and information.
"We’re seeing an increasing number of younger Australians look to various sources from podcasts to social media for advice but regulation in the space is essential," Mr Winters said.
"There’s been a large increase in the number of people giving their opinions on personal finance and investing across various social media platforms but these ‘finfluencers’ often lack any formal education or training – and are often motivated by commercial partnerships or sponsorships with the intention of promoting a specific product or service."
The ASIC sheet discusses topics including where influencers may break the law if unaware of their legal requirements, issues to look into, and reminding them of their obligations.
The Corporations Act 2001 - which applies to persons who provide financial product advice - imposes significant penalties, including up to five years in prison and financial penalties 'into the millions'.
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