When I think of finfluencers, I think of Gen Z on youtube or TikTok (ok, I had to google how to spell TikTok 
)
A finfluencer is a financial influencer – someone who shares or comments on social media, mainly on TikTok and Instagram about finances and investing.
The ones who have been featured on mainstream media are generally young and apparently earning a decent income from their efforts.
Australia’s regulator, ASIC is cracking down on finfluencers.
ASIC stands for Australian Securities and Investments Commission. It is “Australia’s integrated corporate, markets, financial services and consumer credit regulator.”
Some of their roles are to “maintain, facilitate and improve the performance of the financial system and entities in it; promote confident and informed participation by investors and consumers in the financial system.”
And they license financial advisers in Australia.
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Back story
A record number of 18-24 year olds started investing in the stock market over the past two years – 25% of all new investors, in fact. Plus 27% of all intending investors (defined as those wanting to invest in the next 12 months) are in this age group. This is according to a study done by the Australian Securities Exchange (ASX) in 2020.
Interestingly, these young investors are willing to seek advice from a financial adviser.
According to this same study, 37% would seek help with investment decisions and 36% would seek help for access to a wider range of investments.
But 37% don’t know how to find an adviser while 25% think they are too expensive.
And 30% wouldn’t use an adviser because they think their portfolio is too small.
So where are they getting their advice?
According to ASIC’s surveys in July 2020 and again in February – March 2021, when asked who they have received the best piece of financial advice from, 67% cite their parent.
But 28% indicate they follow at least one finfluencer on social media. And of those that follow a finfluencer, 64% reported having changed at least one of their financial behaviours as a result.
Crucially, they were not asked if their finances improved as a result of changing those financial behaviours. I could not find this in the report.
ASIC cited this report in their media release on March 21, 2022. (Although they cited 33% of young people follow a finfluencer whereas the survey report on page 9 cites 28% – not sure why there is a discrepancy).
It is clear that ASIC is worried about the influence finfluencers have over young investors.
ASIC Chair Joseph Longo gave a speech to financial advisers at a conference in September 2021. He gave an example of a young family wanting to know about their life insurance needs and wondering where to get advice.
“Here comes the plot twist.
They may have gone online and sought to educate themselves via a financial influencer or ‘finfluencer’.
ASIC is aware of the fact that the pandemic has created the perfect conditions for finfluencers to flourish. The result is the conflation of general and personal advice, which is now in a state of flux.
We are watching this evolution closely.”
He acknowledges that there is an unmet advice need of Australians seeking quality financial advice and goes on to outline how ASIC is helping financial advisers to help Australians like the young couple.
What is their solution?
ASIC issued an information sheet (INFO 269) titled “Discussing financial products and services online” on March 21, 2022. It outlines how the financial service laws apply to social media influencers.
But they didn’t define who an influencer is.
I most definitely do not consider myself an influencer. And anyone in their right mind wouldn’t either. Don’t you need thousands or hundreds of thousands of followers to be considered an influencer?
But it seems ASIC may disagree because I do discuss financial products and services online.
They threatened 5 years jail for anyone who breaches these financial service laws.
According to the information sheet,
“Financial product advice is a recommendation or statement of opinion which is intended to influence, or which could reasonably be regarded as being intended to influence, a person making a decision in relation to financial products.” (Italics are mine)
It goes on – “You can share factual information that describes the features or terms and conditions of a financial product (or a class of financial products) without giving financial product advice. However, if you present factual information in a way that conveys a recommendation that someone should (or should not) invest in that product or class of products, you could breach the law by providing unlicensed financial product advice.”
Therefore my interpretation is that I cannot recommend any financial product or service eg bank account, credit card, shares, superannuation company, insurance companies, share platform that I personally use and love. I also can’t express my opinion. Because it could be considered as “being intended to influence”.
And I most certainly can’t give you affiliate links to said financial products or services where both of us may benefit even though I’ve disclosed this fact. It would be “dealing by arranging”.
My experience of unmet advice needs
When I first paid off my mortgage, I was so excited. I understood that I had to use the money that I saved from not paying a mortgage in some sort of investment. But I didn’t know what sort of investment.
Colleagues suggested an buying investment property. I met with a mortgage loan officer at a “Big Four” bank. He wasn’t interested in my situation – late 40s single woman – and maybe I gave off vibes that I wasn’t too keen on entering into another mortgage.
I then rang an investment firm that I’d heard being spruiked on radio. The guy who rang me back quickly showed his disinterest when he found out that I had $10k to invest – an amount that was obviously not worth their while.
Next, I made an appointment with a financial adviser within a “Big Four” bank. He told me there was no point in him providing personal advice to me because it would cost $3k to $4k for the advice and I only had $10k. I wholeheartedly agreed.
So it’s not just the young ones who can’t access mainstream financial advice. I was a middle aged woman with $10k cash.
In hindsight, all of this probably contributed to me waking up one morning in a cold sweat, petrified about not being able to retire. Subconsciously I was obviously worried about not knowing how to invest for my retirement.
You know my story of googling “how much I need to retire” and somehow stumbling onto FIRE (Financial Independence Retire Early) blogs. They were all American sites. I was reading about how to contribute to 401k, IRA, Roth IRA, backdoor IRA, HSA etc etc, none of which is available in Australia.
Then I found Aussie Firebug and Strong Money Australia who wrote about FIRE in the Australian context. And boom! I now have examples of what they invest in, their strategies and tips. And I could see their progress. I didn’t follow anyone’s advice blindly. They were so much younger than me. And so I had to adapt their advice (and anyone else’s for that matter) to my own circumstances.
Why I started Latestarterfire
The reason I started my blog (& related social media channels) was that I wanted to share what I’ve learned on the path to achieving Financial Independence and Retire Early(ish) as a Late Starter. That is someone starting in their 40s/50s vs someone starting in their 20s.
Because I couldn’t find anyone who started their FIRE journey like me. There were plenty of people in their 40s but they were at the end of their FIRE journeys, about to retire or already retired.
It was only after I started Latestarterfire that I found Frogdancer Jones on Burning Desire for FIRE. I remember my joy at finding another late starter who has gone on the same path ahead of me.
Representation matters.
Just like seeing Aussie Firebug and Strong Money Australia achieve or pursue FIRE as Australians and Frogdancer Jones’ success as a late starter motivates and inspires me, I too want to contribute my story and journey.
And in doing so, I may help fellow late starters get started on a path where they can take control of their money, achieve financial independence and retire earlier.
What ASIC's crackdown means
While I understand the need for ASIC to crack down on dodgy advice and quite simply, criminals who prey on vulnerable people, I think it’s very heavy handed in trying to solve the problem.
All of us online financial content creators have been lumped in the one basket – the good, the bad and the indifferent. I don’t know what the solution is. But I fear that the very people ASIC wants to protect and help are the ones who will lose out by this action.
Who will they turn to for real life examples, for lived experiences?
Will financial advisers lower their fees? How can Australians, young, old and in between who are just starting their investment journeys afford to pay thousands of dollars for financial advice? Will financial advisers advise on products that don’t earn them a fee eg recommending ETFs?
Why not educate the public on how to discern good financial advice? Why not go after the influencers that give misleading advice or behave deceptively?
Final thoughts
I apologise now.
If what I’m allowed to share is so restrictive that it doesn’t help you, I’m very sorry.
But I will find ways to comply with ASIC and still serve you.
Because my desire to share my story and what I’ve learned is still strong. The potential that doing this may help someone is what keeps me going.
Thank you to everyone who has read and interacted with me over the years, both here and on social media. Your support is very appreciated.
And a huge thank you to those who have written and shared their stories both here and overseas – I have learnt so much from all of you. I value your content and the work you do to deliver that content. 
For another perspective on this topic, Dave at Strong Money Australia has written an excellent article – ASIC’s Crackdown on Financial Content and ‘Finfluencers’
It’s interesting, isn’t it?
Interesting in the same way as the ancient Chinese curse – “May you live in interesting times” kind of way.
I know that the blogs I devoured after I paid off my house and realised I needed to start investing were crucial in developing my understanding of how all of this works. Books can only do so much.
Once someone has that basic understanding, then, as you said, they can tailor their actions to suit their own situation. They also have a more than fighting chance to discern good recommendations from bad.
But without that basic understanding, people are left vulnerable.
Interesting, all right!
Same here – I read all the blogs I could on index funds, ETFs but I also really enjoyed their process and why they decided on those choices. A lot of them had years of posts so I just started from the beginning where I could – learned so much. And yes, adapted information to my own situation.
It’s definitely going to be interesting, moving forward
It is an overreach and they need to re-examine based on the good guys vs those who are influencing with malintent. (or ignorance!!)
They probably don’t have the staffing to do it, sigh!
Sigh… My blog is completely non-monetised, no affiliate links or referrals whatsoever… but I’m still probably going to need to go back and edit a bunch of my posts to be more compliant regardless. I definitely worry that the experiences shared will then become so vague and nonspecific that it’s not actually helpful though.
That is my worry too – that posts will just be generic and therefore not helpful.
Blogs, podcasts were the content that got me started on the financial journey. Many have been American, but having region-focused content besides American ones are so vital because, context. I can’t imagine where I’ll be without the Malaysian “finfluencers”. More ill informed, more susceptible to predatory products, most probably.
It looks like Australians have to look to overseas content and make sense of it themselves if they can’t look at any home grown examples. I know we are all capable of translating the information into our own circumstances but it does help enormously when you can see people like yourself utilising the products available to you. Like you, my financial journey started from reading blogs and listening to podcasts.
PS your post sounds like a goodbye. It isn’t a goodbye, right? *nervous grin*
I’ve always found value in your posts, even if I’m not Australian. I hope you continue sharing your inspiring stories and insights in someway :/
No, it’s not goodbye 🙂 It’s made me more determined to share my journey – just need to work out how to be helpful within ASIC’s guidelines. Thank you for reading & commenting – much appreciated 💛
Hi
No, you’re not a finfluencer.
But the authorities appear to have tarred anyone talking about finance with the same bad brush, whilst neatly allowing those paid ‘officially’ to give financial advice the leeway to continue giving advice, whether good or bad.
Whilst applauding the YouTubers and TikTokkers for bringing investing to the attention of the young masses, I’ve also been dismayed at the risks they’ve encouraged people to take but then, slowly investing in global index trackers is not exciting so they have to spice things up to get their followers, right?
Here, in the UK, some bloggers have pondered over what would happen if the UK authorities were to do similar and crack down on ‘finfluencers’. Recently, an investing app I use received a smack on the wrist from the governing body and had to ask all finfluencers to remove their affiliate links – some TikTokker suggested that the app helped her pay off her debts…yes, I know, very irresponsible. What did these finfluencers do? After removing their links, they proceeded to badmouth the investing app because they were no longer earning from referrals.
When I first started getting interested in investing, I scoured the internet. It was only when I came across the personal blogs that I got the confidence and encouragement to invest myself because these blogs spoke in language I could understand as a beginner investor – they were normal people! Like you, I didn’t follow anyone’s advice blindly, I did my own research and adapted their ideas.
I get what the authorities are doing, trying to protect the gullible and the lazy who will just follow bad advice but as you say, a far greater number of people will lose out as a result of these restrictions.
Yes, I totally get what the authorities want to do too – protect the vulnerable from predatory practices. And trying to grapple with social media as a medium of education among the young. But they should have realised that this education exists in the first place because there is a vacuum – ordinary people (young and older) find it hard to access quality financial information in the mainstream. Who can afford $3k to $4k for financial advice? And you still have no guarantee that it would be good financial advice.
You are right that we’ve all been tarred with the same brush. Thanks for sharing the UK experience – that is so disappointing that those finfluencers trash the product when they no longer earn money from referrals.
I think the moral of the story is to use your own judgement and not just follow blindly what others are doing. Do your own research – but it’s not good enough to have that as a disclaimer anymore. Interesting times ahead!
It is stuff like this that makes me want to shut my blog down completely. There are so many ways to get in trouble nowadays, and you don’t even know what you are doing wrong. It is scary because one screw up could be a huge issue that messes up your life!
I will continue to read whatever you write, but I too, like the others, looked to blogs and other people’s personal experiences to guide how I changed my financial life. They were pivotal in my financial growth.
Yep! A jail sentence would definitely mess up my life!
Thank you for your continued support – I will share my personal experience in a way that is still helpful and relevant within ASIC’s guidelines. It will be a challenge, sigh.
Hi Latestarterfire,
I am finally catching up on my commenting—been wanting to respond to this since you first published it. This is such a disappointing and scary change for Australian “influencers” to contend with.
If I were in your shoes, I’d also feel very uncertain about how to proceed. I feel that content creators like you do so much good for others. It would be heartbreaking and a shame if you were forced to discontinue sharing helpful info.
What ASIC is currently proposing seems far too restrictive and unfair. In the end, it would be a net loss for consumers. I hope they’ll loosen up their guidelines and provide more clarity as to what is allowed or not.
Podcasts and you tube channels have been pulled as a result of this ASIC guideline. Australians will have to depend on overseas content if they want to find out how ordinary folk invest. The other option is from news media. It’s such a shame.
I don’t mind ASIC cracking down on finfluencers when they don’t have any qualifications or when they have affiliate links everywhere. However it’s also probably going to mean people go to professionals who charge way too much for advice and financial planning, or they’ll lose out on being involved in the discussion.
The problem with finfluencers is that because most of them are new, they give the same generic advice quite often – eg ‘invest in ETFs, never individual stocks. That’s not the worst advice in the world but it’s limited. Plus there’s the Daily Mail ‘influencer’ features on how they invested $100K at 22, which maybe inspires some, but it comes across as narcissistic’brand-building.’
Ultimately we should be taught this at school in some way, and how to develop critical thinking.
Can’t agree more that we need to develop critical thinking. I just think it’s a shame that we have to rely on overseas content to educate us when it’s really helpful to have local content geared towards our products and systems.