Beware of Finfluencers!
By Joe Smith
We have all heard the term influencers relating to individuals on social media and many of us will roll our eyes when we hear the term. However, in recent times a new form of this has become more prominent via ‘finfluencers’ – these are influencers who appear to be giving financial advice to their followers on investments and cryptocurrency.
This has become a major issue in the eyes of ASIC who believe that these finfluencers may be providing formal financial advice without an Australia Financial Services (AFS) Licence. There has also been a joint parliamentary committee hearing recently addressing the matter where it is seen as ‘an area of big concern.’
The requirements to hold an AFS licence are substantial and individuals or businesses providing advice must do so in a specific manner providing documents, such as a Statement of Advice (SOA), that take into account an individual’s specific circumstances when providing investment options to them. Product disclosure statements are also provided with these documents to ensure potential investors are fully aware of the investments they are considering.
One critical thing to keep in mind is that influencers are normally paid or provided with a benefit to promote a product or service and the same thing can happen with ‘finfluencers’. This is fraught with danger as they most likely will not be telling people to invest in something that they are not being paid to promote.
In addition to this there are many people out there who promote themselves as business, financial and life coaches or mentors with social media making it easy for people to promote and position themselves in these areas. The most important thing that we can tell you here is to do your research and find out what qualifications and experience individuals or businesses have before deciding to use their products or services.
At UHY Haines Norton CQ we have qualified Chartered Accountants and a Financial Planner with significant experience in accounting, tax, business advice, superannuation and financial planning services. If you would like a no obligation chat with us regarding any of our services, please call UHY Haines Norton CQ on 07 4972 1300 or email email@example.com