ASIC issues warning to influencers promoting high-risk financial products

The influencers are providing unauthorised financial product advice, ASIC said.

The Australian Securities and Investment Commission (ASIC) has issued warning notices to 18 social media influencers suspected of unlawfully promoting high-risk financial products.

These influences are accused of providing unlicensed financial advice to Australians, the ASIC said in a statement on its website.

ASIC’s current concerns lie with influencers— which it calls “finfluencers”—positioning themselves as so-called trading experts.

These “finfluencers” provide unauthorised financial product advice and promote high-risk, complex investment products that can cause real consumer harm, such as contracts for difference (CFDs) and over the counter (OTC) derivative products.

The move is part of ASIC working with regulators from the United Kingdom, United Arab Emirates, Italy, Hong Kong, and Canada to take coordinated actions and crack down on unauthorized influencers.

Together, the regulators used a combination of regulatory and enforcement powers including arrests, warning notices, website takedowns, educational schemes with authorised influencers, and consumer awareness programs to put unauthorised influencers on notice.

“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,” said ASIC commissioner Alan Kirkland.

“In Australia, after ASIC issued INFO 269, we saw that many [influencers] changed what they were saying or became licensed or authorised representatives to comply with the law,” Kirkland said.