ASIC cracks down on unlicensed finfluencers in Australia
Consensus Summary
The Australian Securities and Investments Commission (ASIC) has issued warning notices to four finfluencers suspected of providing unlicensed financial advice, including claims of guaranteed returns, as part of a broader crackdown. This action aligns with the second Global Week of Action Against Unlawful Finfluencers, coordinated by 17 global regulators. ASIC is also reviewing 15 additional finfluencers operating under licensed entities, emphasizing concerns about misleading advice and the influence of social media on financial decision-making. The regulator has previously taken enforcement actions, including revoking licenses for non-compliance, and notes that finfluencers often exploit financial literacy gaps, particularly among Gen Z, where 63% rely on social media for financial information. Experts suggest that while some finfluencers have adjusted their practices since ASIC’s 2022 guidelines, the broader ecosystem remains active, with risks of scams and fraud persisting due to low financial literacy.
✓ Verified by 2+ sources
Key details reported by multiple sources:
- ASIC issued warning notices to four finfluencers suspected of giving unlawful financial advice, including promoting claims of guaranteed returns.
- ASIC is reviewing the licensees of a further 15 finfluencers amid an ongoing crackdown.
- The crackdown is part of the second Global Week of Action Against Unlawful Finfluencers, involving 17 global regulators.
- ASIC Commissioner Alan Kirkland stated that finfluencer activity in Australia is 'significant' and warned that unlicensed advice carries risks for investors.
- ASIC previously cancelled the AFS licence of a company in February 2024 for failing to supervise its finfluencers.
- ASIC’s 2022 guidelines on finfluencers led some influencers to cease operations or obtain licenses, but the ecosystem has not disappeared.
- 63% of Gen Z Australians (aged 18-28) rely on social media for financial information, with 30% using YouTube, 19% Instagram, 17% TikTok, and 18% AI platforms.
Points of Difference
Details reported by only one source:
- The warning notices were the first since ASIC published guidance for online financial services in 2022.
- ASIC is actively monitoring social media and receiving public reports to identify potential breaches.
- Angel Zhong, deputy dean at RMIT University, noted that finfluencers often provide advice that is not tailored to individual financial circumstances.
- Dr Dimitrios Sampasis said finfluencers fill a gap for those who cannot access proper financial advice due to cost or complexity.
- ASIC’s Gen Z Financial Behaviours Report found 1 in 10 Gen Z Australians rely on online finfluencers for advice.
- ASIC previously took action in 2022, leading some finfluencers to remove posts or abandon platforms, with potential jail time or fines over $1 million for violations.
Contradictions
Conflicting information between sources:
- Article 2 (SBS) mentions four finfluencers received warning notices, but no specific details or sources are provided to cross-verify with Article 1 (ABC).
Source Articles
'Finfluencers' suspected of giving unlawful advice hit with warning notices
The warning notice to the so-called "finfluencers" relates to suspected provision of unlicensed financial advice, including promoting claims of guaranteed returns.
'A real risk': Financial watchdog's warning about finfluencers
Four finfluencers have been issued warning notices for allegedly providing unlicensed financial advice.