ASIC targets unlawful "Finfluencers" in global crackdown

The Australian Securities and Investments Commission (ASIC) has issued formal warnings to 18 social media influencers — known as "finfluencers" suspected of illegally promoting high-risk financial products and giving unlicensed financial advice to Australians.

The action forms part of a Global Week of Action Against Unlawful Finfluencers, coordinated by nine international regulators across the UK, UAE, Italy, Hong Kong, Canada and Australia.

Together, the regulators launched a joint enforcement effort using a mix of measures including arrests, warning notices, website removals, educational outreach to legitimate influencers, and public awareness campaigns. The goal: to put rogue finfluencers on notice and protect consumers from potentially harmful and misleading content.

‘FUN IS NOT THE SAME AS FACT’

ASIC Commissioner Alan Kirkland said the joint action sends a clear message: global regulators are taking unlawful finfluencer activity seriously.

“Just because someone’s popular on social media doesn’t mean they’re qualified to give financial advice,” Mr Kirkland said. “Consumers need to check whether a finfluencer is actually licensed or authorised before taking their financial tips seriously especially when your money’s on the line.”

Since the release of ASIC’s guidance in INFO Sheet 269: Discussing Financial Products and Services Online in 2022, there’s been a noticeable drop in unlicensed posts from influencers. Many have changed their content or obtained proper licensing.

“Following the release of INFO 269, we saw a shift some finfluencers either adjusted their messaging or became authorised representatives to comply with the law,” Mr Kirkland said. “Financial services licensees also stepped up, improving how they vet and monitor the influencers they work with.”

HIGH-RISK ADVICE FROM UNLICENSED SOURCES

ASIC remains concerned about finfluencers who portray themselves as trading experts but are unlawfully advising on or promoting complex, high-risk investment products such as contracts for difference (CFDs) and over-the-counter (OTC) derivatives.

Often, their social media content includes misleading claims about the likelihood of financial success, alongside images of luxury lifestyles, sports cars and exotic holidays.

“We’ve seen a pattern where these influencers push people to join exclusive online communities or chat groups, promising access to their ‘trading secrets’ or encouraging users to copy their trades,” Mr Kirkland said.

If a finfluencer isn’t licensed, authorised or exempt under Australian law, they cannot legally provide financial product advice or operate a financial services business.

CHECK BEFORE YOU INVEST

Consumers can use ASIC’s professional registers search tool to check whether an individual or business is licensed to offer financial services.

A recent Moneysmart survey found that 41% of young Australians turn to social media including finfluencers for financial advice or information.

“Our financial services laws are in place to protect investors and support market integrity,” Mr Kirkland said. “They exist to ensure people have a safety net if things go wrong. If you’re giving financial advice online, you need to understand your legal obligations and get professional advice if you’re not sure.”

ASIC actively monitors financial content from finfluencers and will take enforcement action where it sees harm occurring or the law being breached.