The Rise and Risk of Finfluencers in Australia
- Isabella Tziolis
- Jul 30
- 5 min read
Social media has transformed how Australians access financial information. In particular, a new class of online personalities, so-called “finfluencers” are reshaping the way many, especially younger Australians, make decisions about saving, investing, and spending. These self-styled financial influencers utilise social media platforms, including Instagram, TikTok and YouTube to disseminate content ranging from saving tips to specific investment strategies to influence their often young and impressionable audiences.
Recent research by the Australian Securities and Investment Commission (‘ASIC’) reports that 41 percent of young Australians utilise online sources, including finfluencers, for financial advice or information. Further, ASIC’s Young People and Money Survey in 2021 reported that Australians aged 18 to 21 found that 28 percent follow at least one finfluencer on social media. Critically, of those who follow such accounts, 64 percent report that their behaviour has changed because of the content produced and disseminated by that finfluencer.
These figures emphasis why regulators are watching finfluencers, with ASIC in 2022 taking successful court action against Tyson Scholz, known by his online moniker ‘ASX Wolf’, whom ASIC alleged made $1.16 million in 10 months selling stock market courses. The Federal Court found in ASIC’s favour, asserting that Mr Scholz had contravened section 911A of the Corporations Act by carrying on a financial services business without an Australian Financial Services Licence and ordered Mr Scholz to pay costs in the amount of $456,296.54.
The Scholz case emulates that Australian finfluencers must be aware of their statutory requirements before engaging in financial services. These being:
Corporations Act 2001 (Cth):
Misleading and Deceptive Conduct
Under sections 1041E and 1041H, misleading and deceptive conduct through statements or the dissemination of information in in the financial services sector is prohibited. To ensure compliance, finfluencers must ensure their content is true, accurate and can be substantiated. It is important to recognise that your intent does not matter, it is whether the overall impression your post creates when viewed is misleading and deceptive, or likely to mislead your actual audience. ASIC stipulates that phrases such as “trading in this derivative is a risk-free way to make a quick profit on the side” is likely to be misleading, whereas “ETF’s offer good diversification across different asset classes, though there are still risks that the market or sector that the ETF tracks will fall in value”, is unlikely to be misleading.
Additionally, ASIC notes that finfluencers may be liable under Australian Consumer Law for misleading and deceptive conduct under section 18 of Schedule 2, Competition and Consumer Act 2010 (Cth). This provision prohibits misleading or deceptive conduct in trade and commerce.
Financial Product Advice
Pursuant to section 766B, financial product advice means a recommendation or statement of opinion which is intended to influence a person in making a decision in relation to a particular financial product or class of financial products, or an interest in the aforementioned, or could reasonably be regarded as being intended to have such an influence. In the event a finfluencer engages in financial product advice they must be aware of section 911A which requires persons carrying out financial product advice to have an Australian Financial Services Licence. To determine whether a finfluencers recommendation or statement falls under financial product advice, ASIC considers the overall impression created by the content and the circumstances in which it was provided. This includes remuneration and consumer representations. ASIC has noted that if a finfluencer is remunerated by a company or its commission is dependent on consumer behaviours then the finfluencer’s conduct is likely to constitute financial product advice, which requires an Australian Financial Services Licence.
Australian Financial Services Licence:
As mentioned above, finfluencers must be aware of the circumstances in which they are required to possess an Australian Financial Services Licence to disseminate financial content. Notably, carrying out a financial services business without an Australian Financial Services Licence is an offence under the Corporations Act and incurs significant penalties, including up to five years imprisonment for an individual and into the millions of dollars for a corporation.
Recommendations for finfluencers:
Finfluencers must understand their obligations when they are creating content which provides financial product advice and services or promotes affiliate links. ASIC has released Information Sheet 269, specifically targeted to inform finfluencers about their responsibilities in complying with Australian laws. The simple fact that ASIC has consistently engaged with the finfluencer phenomenon by publishing public warnings and materials to assist finfluencers indicates that ASIC will take decisive and strict action against influencers who transgress their responsibilities.
Notably, former ASIC Commissioner Cathie Armour in 2022 stated, “it is crucial that influencers who discuss financial products and services online comply with financial services laws. If they don’t, they risk substantial penalties and put investors at risk”.
Accordingly, finfluencers should:
Recommend that their followers procure their own financial advice from licenced providers.
Ensure that statements in their content are true and accurate, and able to be substantiated to ensure consumers are not misled or deceived.
Inform followers when they are remunerated for their content in relation to the promotion of a financial product or service. Finfluencers may simply say “paid promotion” to indicate such remuneration.
Share only factual information if they do not hold an Australian Financial Services Lincence.
Consider procuring an Australian Financial Services Licence if they want to make influential recommendations or statements on their social media platforms.
Navigating the future of finfluencers in Australia
The rise of finfluencers reflects a broader global shift to democratised, accessible financial information. Yet that influence comes with significant responsibility and growing regulatory scrutiny. In Australia, ASIC has made it abundantly clear that unlicenced and misleading financial advice will not go unchecked. While high profile international actions like, Kim Kardashian’s penalty enforced by the US Securities and Exchange Commission in 2022 in the amount of US$1.26 million for “touting on social media a crypto asset security offered and sold by EthereumMax without disclosing the payment she received for the promotion”, demonstrates that regulators worldwide are cracking down.
For finfluencers the message is clear; understand your legal obligations and comply with them. Finfluencing is about helping your audience make informed decisions in a complex financial landscape. For those seeking clarity on their obligations, professional legal advice can be invaluable.
If you want to ensure your content complies with Australian regulations, seeking expert guidance is a smart investment. At BlackBay Lawyers we specialise in helping creators, influencers and businesses understand and meet their regulatory obligations in this rapidly evolving space.
ABOUT THE AUTHOR
Isabella Tziolis assists as a paralegal in commercial, defamation, employment and general matters and is committed to supporting BlackBay Lawyers mission of delivering exceptional legal services. Her work focuses on assisting in providing comprehensive legal support, conducting extensive research, and offering strategic guidance to clients.
Isabella is currently studying a Bachelor of Laws and a Bachelor of Arts, majoring in Politics and International Relations at the University of New South Wales. Her academic and professional experience has fostered her high attention to detail and strong analytical skills which allows her to efficiently handle high-pressure situations and contribute to effective legal strategies.
