More scrutiny of finfluencers is good news for consumers: FPA
The Financial Planning Association of Australia (FPA) welcomes ASIC’s recent steps to address the significant risks posed by “finfluencers” for Australians.
FPA chief executive officer, Sarah Abood, says it is encouraging to see ASIC providing clear guidance on what is legally allowed when discussing financial products and services online.
“ASIC is reminding finfluencers that the law does apply to them and warning them that ASIC will take legal action if necessary.
“The FPA has long been concerned about an apparent “two tier” approach to the regulation of financial advice, where social influencers operating online seem to be treated differently to financial planners.
“Financial Planners are subject to a high degree of oversight and regulation, and consumers can have confidence in the advice they receive from a professionally qualified and registered Financial Planner. None of these protections apply where finfluencers are concerned.
“Finfluencers can definitely play a role in improving financial literacy and confidence among consumers, and they are often very effective at providing that information in an engaging way online. However they are not legally able to give personal or general advice on financial products, and anyone acting on a recommendation from this source is essentially on their own if things go wrong.
“You can find out if the person you’re speaking with, watching or listening to is registered to give financial advice, by simply typing their name into ASIC’s financial advice register: https://moneysmart.gov.au/financial-advice/financial-advisers-register. This will also tell you if your planner is a member of a professional association like the FPA.”
“ASIC’s actions to enforce the law are very important, showing that the risks of online discussion about financial products and services are being taken more seriously. There are particular risks in areas like cryptocurrency, which is not a regulated financial product,” she says.
“Australians should only act on the advice of qualified, professional financial planners who are complying with a code of ethics to provide advice in your best interests, where there are consumer protections, regulators are supervising them and they are providing support and assistance for clients,” Ms Abood says.