Australians without the means to afford financial advice are being forced to rely on social media and TikTok for their financial advice, according to one MP.
Speaking in the House of Representatives on the Better Advice Bill, Labor MP Julian Hill said the affordability of advice meant younger or poorer Australians were left to seek financial advice on social media.
Last week, managing director of Easton Investments, Nathan Jacobsen, said it would be unlikely to be cost-effective for an adviser to help a client with only $20,000 of investments as they would struggle to afford the $3,000 to $5,000 fee in the first place.
“Everyday Australians are being left to look to social media and TikTok influencers,” Hill said.
“The minister doesn’t think this is a problem as it is no different to speaking to someone in the pub but ASIC [the Australian Securities and Investments Commission] are concerned.
“These ‘influencers’ are taking kickbacks, that is what the Government is leaving people to, and it is a return to the bad old days of commission.”
Earlier this year, ASIC indicated it would be investigating wealth coaches and ‘finfluencers’ with ASIC chair Joe Longo describing them as an “area of big concern” for the regulator. This would particularly examine if any were offering financial advice which would require a licence and was illegal without one.
Meanwhile, the Financial Planning Association of Australia (FPA) chief executive, Dante De Gori, described it as the ‘next bubble to burst’ and that any problems which arose in the space would have a negative effect on legitimate financial advisers.