Finfluencers not to be banned: Hume

Both the minister for superannuation, financial services and the digital economy, Jane Hume, and the corporate regulator’s chair, Joe Longo, have pointed to dangers of finfluencers but will not look to ban them.

Both addressed finfluencers in their opening statements to the Association of Financial Advisers (AFA) conference today and Hume said it was not up to the government or the industry to bail people out who made financial decisions that went “drastically wrong” based on the musings of a taxi driver, the man down the pub, or a 16-year-old on TikTok.

“We don’t believe in establishing unworkable rail guards that inhibit progress and innovation. I have absolutely no interest in perpetuating a nanny state culture where we resort to banning things to save people from their own follies,” Hume said.

Related News:

“I believe in personal responsibility and common sense. But for that to work, we must make sure that consumers have access to the information that they need to make informed decisions.

“Consumers must have the information to know that the influencer is not an accredited adviser, and do not assume that they will act in their best interest and give them unconflicted advice.”

Hume said when people appropriated the brand of being a financial adviser, without having done any due diligence or having the same obligations, it undermined the adviser brand.

“That's why we need an up-to-date financial advisers register that consumers can access. It's also why one of ASIC’s [the Australian Securities and Investments Commission’s] most important enforcement tasks is preventing unauthorised advisers from claiming to be advisers,” Hume said.

“The threat is not from people who may incidentally or accidentally veer into financial advice territory on their social media. The threat is from people who are fraudulent, who claim to be trusted advisers, but are not. The threat to the advice industry to the consumer is for people who lie and deceive in order to get consumers to trust them, and in doing so undermine the trust of the entire industry.

“You should all hold your financial adviser standards, your registration, and your authorisation up like a badge of honour because consumers know that they can trust you that you have the knowledge and that you had the experience to do best by them.”

Hume noted she did not want to prevent people from being interested in finance, or from expressing their views or engaging with others and learning.

“But of course, that isn't a free pass to scam people or to engage in misleading or deceptive or dishonest behaviour. There's never an excuse for that. But the existence of a small number of unscrupulous active doesn't justify wholesale constraints and policing a freedom of expression for everyone,” she said.

“Personal responsibility and freedom to make your own choices are hallmark of a liberal democracy. But we do need places that people can turn to away from the noise that they know will provide them with good quality, accredited advice. So, I want to send a message out loud and clear. If you want advice, authorised registered financial planners are a service that you can trust.”

ASIC chair, Longo, gave an example of a couple who wanted access to affordable personal advice but did not know how to assess the quality of advice offered.

“Here comes the plot twist. They may have gone online and sought to educate themselves via a financial influencer or ‘finfluencer’,” Longo said.

“ASIC is aware of the fact that the pandemic has created the perfect conditions for finfluencers to flourish. The result is the conflation of general and personal advice, which is now in a state of flux.

“We are watching this evolution closely. We are making it clear to social media content creators and the public that there is a clear legal difference between advice and opinion.

“And we are working to enable industry to counterbalance opinion with professional, good-quality advice that is also affordable.”

Recommended for you




I really don't understand the focus on finfluencers. They are clearly not financial advisers. My concern is the 'financial educators'. Your average consumer can't tell the difference between them and licenced financial advice.

Not sure why finfluencers or financial educators are treated differently. I thought the legislation basically defined financial advice as "Paid service that a consumer might influence a person or be interepted as financial advice". So to me if they are paid they are already covered. If they are a taxi driver or tik tok person who is not paid, then I agree with Hume.

Most people that give financial advice via an online channel are paid. Not directly by the viewer, but by advertising revenue which is broadly proportional to their audience size. That's why they do it. Sometimes they have additional revenue sources such as kickbacks from products they recommend.

If they don't operate under an AFSL, then what they are providing is illegal financial advice. Hume is deluded to think that Tik Tok or any other online advice is in any way analogous to BBQ or pub advice. They are illegal, harmful, commercial operations, which she as Financial Services Minister is inexplicably condoning. She has proven herself unfit for the role. Scomo, it's time to replace her.

As long as Finfluencers & similar people such as those whom spruik property and SMSFs always issue a disclosure that their "opinions" are not financial advice and should not be relied upon and direct everyone to the Financial Adviser Register, I don't see a problem.

If Hume believes in common sense then why does she suppprt FASEA?

To the average punter in the street, they don't understand the difference between general advice, personal advice or general information, nor do they understand the difference between a financial coach, financial planner, private wealth adviser and any other name a financial planner wants to name themselves. If financial planner is protected to those as an authorised representative, why don't we legislate that if you are a licensed financial planner, you can only call yourself a financial planner.

So an accountant setting up an SMSF can do it via tik tok as finfluencer and they are fine according to Hume?

It's been a while since I studied so I can't remember verbatim the statute and I don't include the corps act in my night time reading list but something along the lines of "likely to influence a person to acquire or dispose of a financial product is financial advice". Am I correct has this law too been changed with all the others?

Therefore these people are providing financial advice whether they claim to be an adviser or not.

Therefore (if I am correct) Hume doesn't know the corps act?

Exactly what I was thinking. If your'opinion' is likely to influence a decision, it is advice. That's why registered planners are too scared to have an opinion without putting it in an SOA and having to charge for the work.
My god our life would be easy and advice would be cheap if we could provide clients with our 'educated opinion' as to what they should do. I would have thought this would be a lot more helpful to a client than an uneducated opinion.

“We don’t believe in establishing unworkable rail guards that inhibit progress and innovation. I have absolutely no interest in perpetuating a nanny state culture where we resort to banning things to save people from their own follies,” Hume said.
YET HUME, ODWYER, FRYDENBERG, LNP & ASIC have done exactly that to Real Advisers. Complete and utter mass strangulation by over regulation.
Complete and utter mind numbing nanny state orders over Real Advisers.

So why go through all the hurdles to become a licensed adviser? It is so much easier to call yourself a finfluencer, wealth coach or barefoot investor and you have a green light from Hume to do whatever you want without fear of ASIC breathing down your neck. What a great outcome for the thousands and thousands of client who will be scammed with no recourse at all.

Add new comment