ASIC Issues Warnings to 18 'Finfluencers' in Global Crackdown on Unlicensed Advice

The Australian Securities and Investments Commission (ASIC) has issued warning notices to 18 social media "finfluencers" suspected of unlawfully promoting high-risk financial products and providing unlicensed financial advice to Australians. This action was part of a Global Week of Action Against Unlawful Finfluencers, involving nine international market regulators.

Last week, ASIC collaborated with regulators from the United Kingdom, United Arab Emirates, Italy, Hong Kong, and Canada in coordinated efforts to address unauthorized finfluencer activity. These regulators employed a range of tools, including arrests, warning notices, website takedowns, educational schemes with authorized finfluencers, and consumer awareness programs. The aim was to put unauthorized finfluencers on notice and to warn consumers about the risks associated with unauthorized and misleading finfluencer content.

Regarding the UAE's efforts, the Securities and Commodities Authority (SCA) today released its official list of individuals authorized to operate as financial influencers under a new resolution​. This resolution outlines clear regulatory guidelines for those offering financial opinions, advice, or recommendations within the UAE across various platforms.

ASIC Commissioner Alan Kirkland emphasized the international cooperation, stating, "Regulators across the world have joined forces to disrupt unlawful finfluencer activity." He also urged consumers to be discerning: "It's important that consumers separate fun from fact when it comes to finfluencer content. Popularity doesn't equal credibility. Check their credentials and whether they're licensed or authorised, before checking your money out."

Following the issuance of INFO Sheet 269 "Discussing financial products and services online" (INFO 269) in 2022, ASIC observed a decrease in social media posts promoting financial products and services by unauthorized finfluencers in Australia. Mr. Kirkland noted, "In Australia, after ASIC issued INFO 269, we saw that many finfluencers changed what they were saying or became licensed or authorised representatives to comply with the law." He added that Australian Financial Services licensees engaging influencers also improved their due diligence and monitoring.

ASIC's current concerns largely focus on finfluencers who portray themselves as "trading experts" and provide unauthorized financial product advice or promote high-risk, complex investment products that can lead to consumer harm, such as contracts for difference (CFDs) and over-the-counter (OTC) derivative products. Their social media content often includes misleading representations about success, accompanied by images of lavish lifestyles. Mr. Kirkland observed a pattern where "these unlicensed finfluencers invite consumers to join their closed communities or forums to learn their secrets to success or copy their trades."

ASIC reminds the public that if a finfluencer is not licensed, an authorized representative, or exempt, they are legally prohibited from conducting an investment advice business in Australia. Investors and consumers can verify credentials using ASIC's professional registers search tool. Recent Moneysmart research indicates that 41% of young Australians seek financial information or advice from online sources, including finfluencers. Mr. Kirkland concluded that Australia's financial services laws protect investors and promote market integrity, urging individuals who discuss financial products online to understand the law and seek legal advice if unsure. ASIC conducts targeted monitoring of finfluencer content and will take enforcement action where harm occurs. Unlicensed activity can be reported to ASIC via its website or phone line.