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The Finfluencers of 2023: A Great Blessing or Spooky Curse?

What is a ‘finfluencer’? With the growth of short-form media through TikTok, Instagram reels, and YouTube shorts, the “‘finance influencer” has emerged. These ‘Finfluencers’ produce brief snippets of information involving financially based content from young people.  However, these financial content creators have recently come under fire through ASIC’s latest reinforcements of licensing and regulations. Many young Australians are curious about what this means for their favourite online financial content creators and its consequences. 

How Has ASIC Responded to This Trend?

ASIC recently released a statement clarifying the rules these Finfluencers must abide by, which mainly focuses on an Australian Financial Services (AFS) License now required when discussing financial products and services online. With the emergence of apps such as TikTok, the Finfluencers craze has boomed, with content creators providing accessible information to millions of Australians for free on hashtags such as FinTok, engaging more than 250m views.  

Most Finfluencers are well-meaning with good intentions who may unknowingly influence people’s investment decisions. However, there is also a minority who illegally promote financial products with a vested interest in the performance of this product through sponsorships.   This regulation clarification from ASIC will slow the Finfluencers boom in Australia, with AFS licensing ranging from $3,721 for financial planners to $7,537 for a responsible entity or market maker. With many creators providing this content for free, the slowing of these videos is becoming evident as Finfluencers are looking to avoid these punishments and don’t have the means to acquire an AFS license.   

Despite this slowing, these rules will benefit consumers of Finfluencer’s content. They will now receive information from qualified creators licensed to provide this information without the fear of fines with no biases on investment decisions unless sponsored content is declared. 

Could young Australians be at risk?

With the emergence of covid, many young Australians became increasingly interested in trading stocks and investments. This is a net positive for the consumer, financial advisors, and planners. The more educated an individual becomes in the world of finance, the more likely they will be to seek out these professional advisors for further information on loans and investment decisions.  

These rules create a new worry for consumers of this type of content. A shift is likely to occur for some Finfluencers from general financial services and product advice to a heavier focus on cryptocurrency, with the rules and regulations on this type of content almost non-existent. This should be a serious concern for young investors trying to build their portfolios. The ACCC reported 10,412 crypto scam reports in 2021, totalling a loss of $129m for Australians.  

Under the Finfluence.

Overall, there is a place in the financial sphere for Finfluencers. The younger market of consumers and investors has shown that they are craving financial education to create smarter investment decisions for themselves. But they want to consume this education and advice through the media of a Finfluencer.  In recent years, this void in the financial advice industry for the younger millennial market has been filled with the boom of Finfluencers and Financial TikTok.

Despite this, ASIC’s new regulations must be followed when providing this information to young susceptible viewers to avoid creating a dangerous and highly risky environment for young Australians.   Moving forward, it will need to be a licensed and experienced advisor that can flow into the void that current unlicensed Finfluencers will be leaving behind them.  

So the big question will now be if the currently experienced advisors create the content that current Finfluencers produce and create it so that Millennials will continue to want to consume this new content as they did the old.      

Help My Wealth is team of experienced, licensed professionals offering people the ability to join and be assisted in taking the next step in improving their financial and life journey in a balanced way. So reach out to HMW now and start effectively taking control of your financial journey.

finfluencer speaking into a microphone

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The Finfluencers of 2023: A Great Blessing or Spooky Curse?

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