Katharina Buczek
Social media might not be the best avenue to seek out financial advice. Nonetheless, many influencers have grown their following by sharing money-making and saving tips with followers.
But the Australian government has had enough. In March, the Australian Securities and Investment Commission (ASIC) issued a new information sheet warning influencers against discussing financial advice without a license. Failure to comply could result in up to five years in jail.
“Financial services laws protect investors and promote market integrity. They set minimum requirements and provide important protections for investors if something goes wrong,” the ASIC wrote.
The Commission admitted to monitoring “select online financial discussion by influencers who promote financial products for any misleading or deceptive representations or unlicensed financial services.”
If influencers perform any financial services without an AFS license, then they are not abiding by the 2001 Corporations act.
“The Corporations Act imposes significant penalties, including up to five years’ imprisonment for an individual and financial penalties into the millions of dollars for a corporation,” the ASIC added.
The information sheet also sought to inform influencers about their legal obligations while discussing financial products and services online or promoting affiliates.
The ASIC advises influencers to understand whether or not they are providing “financial product advice or arranging for your followers to deal in a financial product.”
The Commission also encourages Australian influencers to ensure that all posted content is balanced and accurate.
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