ASIC is working alongside 16 global regulators as part of its crackdown on unlawful social media 'finfluencers', amid growing concern about the influence of financial information online, particularly among younger Australians.
Warning notices have been issued to four finfluencers suspected of providing unlicensed financial advice or engaging in misleading or deceptive conduct. ASIC has also commenced a review of several Australian Financial Services (AFS) licensees and their supervision of 15 finfluencers operating under their licences.
The action is intended to disrupt unlawful finfluencer online promotion before consumers suffer financial harm.
The warning notices to the four finfluencers relate to suspected provision of unlicensed financial advice, including promoting claims of guaranteed returns, which may also be misleading or deceptive.
ASIC's action formed part of the second Global Week of Action Against Unlawful Finfluencers, involving 17 regulators globally, including ASIC, across Asia, Europe, North America, South America and the Middle East to disrupt unlawful online financial promotion and warn consumers about misinformation.
The continued crackdown reflects ASIC's concern about the growing influence of social media on financial decision making.
Recent Moneysmart research shows that 63% of Gen Z Australians (aged 18-28) rely on social media for financial information, with more than half saying they somewhat or completely trust financial information on social media (56%) and from finfluencers (52%) (26-049MR).
ASIC Commissioner Alan Kirkland said, 'Unlawful finfluencer activity doesn't respect borders, which is why regulators are taking strong action together for a second year in a row.
'What people see online is shaped by algorithms designed to drive clicks and engagement, rather than promoting accurate information. This means consumers are more exposed to biased or misleading content,' Mr Kirkland said.
ASIC's surveillance focused on finfluencers targeting Australian investors and discussing a range of financial products, including leveraged derivatives, shares and exchange-traded funds.
Commissioner Kirkland continued, 'Finfluencers must either hold an AFS licence or operate as an authorised representative to legally provide financial product advice or arrange for their followers to deal in financial products.
'When viewing financial content on social media, we urge Australians to check a creator's credentials, and sense‑check the information before acting on it.
'If someone on social media is promising easy money or guaranteed returns, there is a real risk they're breaking the law, and you could be the one who loses money,' Mr Kirkland said.
Consumers and investors can check whether a person or business is licensed or authorised using ASIC's professional registers search tool.
ASIC reminds licensees of their obligations
For the first time since issuing Information Sheet 269 Discussing financial products and services online (INFO 269) in 2022, ASIC is reminding licensees about their supervisory obligations when engaging finfluencers.
Under these arrangements, unlicensed finfluencers may operate as authorised representatives of AFS licensees, however responsibility for supervising finfluencer conduct and the liability for any breaches remains with the licensee.
As part of this, ASIC has contacted and met with three AFS licensees to review their supervision of 15 finfluencers operating as authorised representatives and reminding them of their legal supervisory obligations.
ASIC expects licensees that authorise finfluencers to have adequate, documented arrangements in place to actively supervise their conduct, and to maintain records of that supervision.
'Licensees remain responsible and liable for what their representatives say and do online,' Mr Kirkland said.
'We expect active supervision, not a set‑and‑forget approach.'
ASIC will continue monitoring social media activity and may take enforcement action where finfluencer conduct or licensee failures place Australian consumers at risk.
Australians should always check whether a person or business is licensed or authorised before acting on financial advice they see online.
'If a social media influencer isn't licensed or authorised, they cannot offer financial advice in Australia and could face up to five years' imprisonment or million-dollar fines,' Mr Kirkland said.
Moneysmart provides free, independent information to help consumers make informed decisions.
Suspected unlicensed finfluencer activity can be reported to ASIC via the Reporting misconduct to ASIC webpage, or by calling 1300 300 630, so that ASIC can consider appropriate regulatory action.
