ASIC Issues Warnings To 18 Finfluencers Over Unlicensed Financial Promotions

The financial regulator in Australia has issued warnings to 18 social media influencers, widely known as ‘finfluencers,’ for their questionable online activities. These individuals were believed to promote high-risk financial products, including contracts for differences (CFDs) and other over-the-counter (OTC) derivatives, without the proper licensing.

In addition, they were also suspected of giving financial advice without holding an authorized license, raising serious concerns about investor safety.

ASIC Targets Unlicensed Finfluencers To Protect Consumers

This move by the Australian Securities and Investments Commission (ASIC) is part of a wider global effort to tackle the issue of unlicensed finfluencers. It involves collaboration with nine other regulators who are also working to address growing concerns in this space.

Recently, the Financial Conduct Authority (FCA) in the United Kingdom revealed the steps it has taken against these types of influencers. Its actions included arrests, the launch of criminal cases, cease-and-desist orders, and the issuance of warning notices.

ASIC Commissioner Alan Kirkland explained that a recurring issue has been the way these finfluencers operate. They often invite individuals into private groups or communities where they claim to share exclusive knowledge or trade strategies, positioning themselves as expert traders.

However, many of them are offering financial advice without authorization, particularly concerning risky financial products, which can be dangerous for consumers.

ASIC Aims To Curb Misleading Financial Content And Enforce Licensing Rules Online

According to research, around 41 percent of young Australians rely on online platforms, including social media, as a source of financial information and advice. This makes the presence of misleading content more concerning.

ASIC pointed out that the posts by these finfluencers often give a false impression of guaranteed success through the products or strategies they showcase. Many try to attract retail traders by posting images of expensive lifestyles, luxury cars, and other symbols of wealth.

In addition to ASIC’s efforts, the financial regulator in Dubai, which is also part of the global campaign, has introduced a rule requiring anyone who produces financial content online to obtain a regulatory license. This rule applies to those who offer investment advice, financial promotions, or market commentary through digital platforms.

Although Australia has not introduced a specific licensing rule for online financial content creators, the law still applies. ASIC stressed that anyone offering financial advice online must hold a proper license under the country’s existing financial advisory regulations. In the past, ASIC has already taken enforcement action against well-known finfluencers who engaged in unlicensed activities.