The minister for financial services, superannuation and the digital economy, Senator Jane Hume, is wrong to dismiss finfluencers as not being worth regulating, according to the Stockbrokers and Financial Advisers Association (SAFAA).
Speaking at the MarketLit forum, Judith Fox, SAFAA chief executive, pointed to comments made by the minister in September when she said the Government would not seek to ban them.
“Hume said ‘buyer beware, we’re not going to regulate you, do what you like’; she said finfluencers are the same as the guy down the pub or a taxi driver,” Fox said.
“Well, there’s a few problems with that because the taxi driver or the ‘guy at the pub’ might only have one person listening to them whereas on social media, we’re talking hundred, thousands, potentially millions of followers.”
Fox said it was an inaccurate comparison as taxi drivers and the “guy at the pub” did not have any clout or followers in the way that finfluencers did.
“No one Google’s taxi drivers or guy at the pub to seek financial advice and the other issue is people giving opinion or commentary could often be making money according to the number of views they generate,” Fox said.
“While there’s nothing wrong with that, it is a problem if it is straying into giving financial advice because they haven’t sat the [adviser] exam, they haven’t done a degree and they aren’t licenced, they don’t have 40 hours of CPD [continuing professional development] per annum they have to fulfil.
“Worst of all, there’s no consumer protection and that’s the really big missing piece. An unregulated social media and financial advice there are no protections for consumers, which in the regulated world there are significant protections.”
