Finfluencer usage drops on back of ASIC crackdown

BY VOSTRO PRIVATE WEALTH

The bank’s Investor Insight study of over 1,000 Australian investors found the number of people seeking investment advice from social media has fallen from 19 per cent last year to 13 per cent. This is particularly dramatic for investors in the Gen Z demographic, where it fell by 45 per cent from 37 per cent in 2022 to 20 per cent this year. For millennials, it has fallen from 26 per cent to 19 per cent. The most popular sources of investment information are market research/industry reports at 36 per cent, company reports at 33 per cent and financial advisers at 31 per cent. There has been a recent crackdown on finfluencers, with ASIC stating last year that finfluencers now need to have an Australian Financial Services licence (AFSL) if they want to carry on a business providing financial advice.

“If you carry on a business of providing financial services, you must hold an AFS licence (unless you are exempt or are authorised to provide those services as a representative of another person who holds an AFS licence). Otherwise, you may be in breach of the licensing requirements under the law,” it said in a 2022 update.

ASIC also has notes for firms that use finfluencers, reminding them to do their due diligence on the individuals, put in place appropriate risk management systems, have sufficient compliance resources to monitor the finfluencer, and ensure they only promote products to the firm’s target market as laid out in the target market determination.

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