Four Australian influencers have been given warnings after being accused of “misleading and deceptive conduct” by a corporate watchdog.

The Australian Securities and Investments Commission (ASIC) said the “finfluencers” had been suspected of handing out financial advice and making misleading claims, such as guaranteed returns, on social media, despite not having a licence.

“ASIC is concerned that you may be contravening Australian financial services laws by carrying on a financial services business in Australia without being authorised to do so,” the warning letter sent to the influencers read.

“It is your responsibility to be aware of and comply with your obligations.”

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Those who are unlicensed can operate, but only as authorised representatives of the Australian Financial Services, which are responsible for what the influencers say.

As a result, ASIC is also reviewing several licensees who manage and supervise 15 influencers.

The watchdog did not name those who were sent the warning letter.

Alarming statistics

More and more young people are taking an interest in their finances in hopes of trying to set themselves up for the future.

According to new research by ASIC’s Moneysmart platform, nearly two-thirds of Gen Z Aussies are using social media to make decisions on their finances.

More than half (56 per cent) who were surveyed say they somewhat or completely trust the information on platforms such as TikTok and Instagram.

Roughly the same amount (52 per cent) said they were confident in the advice from finfluencers while almost two-thirds trusted AI platforms.

Almost three quarters of Gen Z Aussies (72 per cent) said they have seen advertising on social media that was encouraging them to invest in cryptocurrency in the last 12 months.

The watchdog found young Australians are putting “high levels of trust” in “unreliable sources” that could lead to risky choices.

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ASIC Commissioner Alan Kirkland said finfluencers were encouraging people to invest in products such as crypto, shares and exchange-traded funds.

But he flagged those were areas of “greatest risk of harm”, adding that any promises of higher-than-average or guaranteed returns was a “red flag”.

The watchdog just last week warned about investing in crypto as expectations on returns, price and realities of long-term investing may be unrealistic.

It urged young Aussies who seek out finfluencers to also find and verify evidence that backs up what they are being told.

Global crackdown

ASIC is one of 16 regulators around the world cracking down on unlawful influencers.

Comm Kirkland said finfluencer activity had grown in Australia, saying it was a concern videos could pop up on social media at any time.

“They target a broad swathe of Australians — both men and women — but many tailor their content specifically to appeal to younger audiences,” he told The Nightly.

Finfluencing itself is not legal, but it does become a problem when it crosses a threshold.

“That’s not a concern to us if finfluencers are operating within the law, but we are particularly concerned if they’re giving financial advice,” he said.

“Because if influencers are encouraging people to invest their money in particular ways, then that carries risks for those investors.

“This is an issue of global concern.”

Comm Kirkland said investigators have been trawling through social media to find those who may be breaching the law.

He added that members of the public have helped to track down the four finfluencers who were accused of misleading and deceptive conduct.

“It’s based on those sources of intelligence that we’ve identified some influencers that we think may be breaking the law, and they’re the ones that we’ve issued warning notices to.”

Individuals can be punished by up to five years in jail or fined $1 million, while licensees can face heavier penalties.