Brief
- ASIC has warned four finfluencers about unlicensed advice.
- Young Australians are urged to be cautious about finfluencer content.
Dodgy financial advice provided by social media influencers is facing a crackdown, with gen Z the most exposed to the misleading tips.
The Australian Securities and Investments Commission (ASIC) has issued warning notices to four financial influencers, also known as finfluencers.
They are suspected of providing unlicensed financial advice, such as promoting claims of guaranteed returns, which could also be misleading or deceptive.
A recent survey by the financial watchdog found about two-thirds of Australians aged 18 to 28 used social media platforms to seek financial advice — and more than half said they trusted their takes.
"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," ASIC Commissioner Alan Kirkland said.
"What people see online is shaped by algorithms designed to drive clicks and engagement, rather than promoting accurate information."
While the finfluencers have not been named, the crackdown by ASIC has focused on those targeting Australian investors and discussing products including leveraged derivatives, shares and exchange-traded funds.
Finfluencers must hold a licence
The ASIC survey also found some young Australians were seeking out reputable and trustworthy financial content, with 6 per cent saying they used formal or professional sources.
However, the lack of control over their algorithm meant personal research often led them down a virtual rabbit hole of unreliable accounts designed for engagement rather than accuracy.
ASIC urged young Australians to check whether a person or business is licensed or authorised before acting on their financial information through the ASIC Professional Registers Search.
Finfluencers must hold an Australian Financial Services licence, or operate as a representative of someone with that licence, if they want to legally provide advice on financial products.
Those who aren't licensed or authorised could be jailed for up to five years or face million-dollar fines.
For the latest from SBS News, download our app and subscribe to our newsletter.
