The Financial Markets Authority (FMA) has released a guide for talking about money online. This comes amid concerns that some bloggers and social media personalities are offering what could be considered as regulated financial advice.
According to FMA chief executive Rob Everett, the new guide is intended for social media influencers talking about financial topics, hence the nickname “finfluencers”. However, the guide also contains tips for consumers on how to discern financial commentary being shared on social media.
“Many people now offer their thoughts and perspectives on all sorts of financial matters and some have built strong followings,” Everett said.
“It’s great to see more people taking an interest and talking about financial matters online, helping others get more familiar with financial products. However, influencers do not want to find themselves caught offering advice they’re not qualified or authorised to give. It’s also important for consumers to be wary of taking an influencer’s recommendation that might not be suitable for them.”
Under the new financial advice law that came into effect in March, all individuals who give regulated financial advice to the public must have a Financial Advice Provider licence or represent a firm that has such a licence. All providers of financial advice must adhere to a Code of Conduct which requires them to act with integrity and place the interests of their clients first.
According to Everett, it is usually fine to talk about general financial matters. But when social media influencers being recommending particular products, such as specific funds, stocks or insurance, then it’s very likely they are giving regulated financial advice.
“We’re also reminding influencers to be wary of promoting high risk products like cryptocurrency and derivatives,” he added. “Not only do these assets have a high risk of people losing money, they’re also often used as bait in scams.”
The guide states that influencers must disclose all paid and/or gifted posts, in line with the Advertising Standards Authority code. They must also exercise prudence in moderating comments and act responsibly, especially with vulnerable consumers.