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Finfluencers are ‘afraid’ that ASIC will make an example of it

“ASIC has been very clear…if your discussion is influencing people’s investment behavior, you’re on the verge of providing financial advice,” Dr. Zhong said.

“[ASIC] doesn’t deny anyone the ability to share financial advice, all you need to do is get a license. And if you don’t have the ability to get licensed, you don’t really have the expertise and track record to share your financial advice.

“Decrease in discussions”

An ASIC spokesperson confirmed that its warnings had a demonstrable effect on online behavior.

“We continue to monitor the activity of certain influencers and have observed a decrease in financial product discussions over the past few months, with some activity shifting to lifestyle content,” the spokesperson said.

It is understood that at least two finfluencers are in talks with ASIC or financial services licensees to be allowed to provide advice online.

Dr Zhong said the “elephant in the room” was the lack of access to affordable, high-quality financial advice. Adviser fees have soared to $3,529 per year, according to research from Adviser Ratings.

Meanwhile, around 11,500 advisers have left the industry since 2017. This indicates a 41% reduction in supply, according to researcher Wealth Data.

“Influencers exist because of the explosion of retail investors in the market and because there is no quality, affordable financial advice,” Dr. Zhong said.

‘Freak out’: Finfluencers go vanilla

Amy Liang, who has 5,000 followers on her @moneywithaims Instagram account, said the ASIC crackdown prompted her to consider getting licensed.

“I’m still thinking about it, but I’ll see how things go… It’ll be something I have to think about because it’s an important decision to make.”

The average licensing fee paid by a financial advisor to be authorized by a licensee is $49,664 per year, according to research by CoreData. Mandatory professional liability insurance costs between $10,000 and $30,000 more.

Ms. Liang works as a risk analyst at a major bank and deleted content after the ASIC update. She recalls conversations between her fellow influencers encouraging others to check out old content for breaking the rules.

While she doesn’t think she needed to make a “huge” change in her content, she now posts more about budgeting, saving, and the money mindset, and less about where she invests.

“I think right now everyone is talking about [finance] more generically, which is sad. “I think we’re losing a lot of valuable content that people would like to see,” she said.

Maddie Walton, who uses the Instagram account @moneywithmaddie, said finfluencers were concerned ASIC was looking to make an example of them.

“I stopped posting for a few months because we were really scared. We were so worried about becoming an example for ASIC,” she said.

Ms. Walton, who previously shared content on investing, now shares information related to buying a home and taking out a mortgage. She also left her scientific work to become a mortgage broker and did not plan to obtain a licence.

“My content has leaned more towards lifestyle finance, not specific investments, which is a bit of a shame because I’d love to talk about that,” she said.

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