ASIC puts 18 finfluencers on notice amid global campaign

Eighteen finfluencers have received warnings from ASIC for promoting high-risk products and providing unlicensed financial advice.

The warnings were part of a Global Week of Action Against Unlawful Finfluencers, which saw ASIC participate in a coordinated effort with several international regulators to crack down on finfluencers behaving badly.

In some instances, finfluencers were even arrested for their actions, while others were ordered to take their websites down.

In London, the Financial Conduct Authority arrested three individuals and launched criminal proceedings against them. It interviewed a further four finfluencers, sent seven cease and desist letters, and issued 50 warning alerts which it expects to result in more than 650 takedown requests.

The Autorité des marchés financiers in Quebec contacted several finfluencers with more than one million followers to request they remove posts from their social media accounts. Meanwhile, Canada's BC Securities Commission issued 74 letters to YouTubers and others from around the world who promoted listed companies in British Columbia and hand-delivered a caution letter to a Vancouver finfluencer about potentially unregistered activity, suggesting he seek legal advice. The Ontario Securities Commission also hand-delivered warnings alongside law enforcement.

Recent Moneysmart research found that 41% of young Australians seek financial information or advice from online sources such as social media, including finfluencers.

Since it began cracking down on finfluencers in 2022, ASIC said it has seen a significant drop in the number of social media posts spruiking financial products and services by unauthorised finfluencers.

However, it said its current concerns lay with finfluencers positioning themselves as so-called trading experts, who provide unauthorised product advice and promote high-risk, and complex investment products, such as contracts for difference (CFDs) and over the counter (OTC) derivative products.

It said they're often making misleading or deceptive representations about the prospects of success from the products or trading strategies they promote, as well as sharing images of lavish lifestyles, sportscars and other luxury goods.

"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," ASIC commissioner Alan Kirkland said.

"We are seeing a pattern where these unlicensed finfluencers invite consumers to join their closed communities or forums to learn their secrets to success or copy their trades."