Finfluencers warned by regulator: What’s next in ASIC’s crackdown?

The four finfluencers – or financial influencers – are suspected of providing unlicensed financial advice or engaging in misleading or deceptive conduct as a result of online content these influencers had shared, some making claims of guaranteed returns. The ASIC warnings were issued during the second Global Week of Action Against Unlawful Finfluencers, attracting regulators from Asia, Europe, North America, South America, and the Middle East to also take actions aimed at disrupting unlawful online financial promotion and providing consumer education around discerning legitimate advice and financial products versus misinformation and paid-for promotions.

The market for finfluencers is a ripe one, which opportunistic individuals and companies have identified and latched onto, and consumers are – literally – paying the price.

In 2024, the Australian Financial Review reported that despite the overwhelming number of TikTok videos offering finance-related videos, there were some commendable content creators and “the good outweighed the bad”.

At that time, there were reportedly 243.1 million finance videos on TikTok (commonly referred to as “FinTok”), though the report pointed to a study that claimed 63 per cent of financial advice on TikTok is misleading, another up to 87 per cent.

Recent Moneysmart research shows that 63 per cent of Australians aged 18–28 rely on social media for financial information, with more than half (56 per cent) saying they somewhat or completely trust financial information on social media and from finfluencers (52 per cent).

Timothy Chan is a Special Counsel at Norton Rose Fulbright. He is an insurance lawyer with extensive experience in non-contentious and contentious matters. Chan says there’s reason for concern over financial literacy and credible sources of advice.

“ASIC’s research shows that more than half of Gen Z Australians rely on social media for financial information, and more than half say they somewhat or completely trust financial information on social media.”

Chan clarifies that Australian financial services laws can apply to offshore finfluencers who target Australian audiences if they are deemed to be carrying on a financial services business in Australia. Criminal and civil penalties can apply.

In 2022, ASIC issued Information Sheet 269 Discussing financial products and services online. Four years later, ASIC has reminded licensees about their supervisory obligations when engaging finfluencers.

Under these arrangements, unlicensed finfluencers may operate as authorised representatives of AFS licensees, however responsibility for supervising finfluencer conduct and the liability for any breaches remains with the licensee.

Carrying on a financial services business without an AFS licence is an offence under the Corporations Act 2001 (Cth), unless you are authorised as a representative of an AFS licensee or an exemption applies. The Corporations Act imposes significant penalties, including up to five years’ imprisonment for an individual and financial penalties into the millions of dollars for a corporation.

According to ASIC, the Corporations Act 2001 imposes:

• a single licensing regime for financial sales, advice and dealings in relation to financial products,
• consistent and comparable financial product disclosure,
• and a single authorisation procedure for financial exchanges and clearing and settlement facilities.

In April, ASIC announced that it had contacted and met with three AFS licensees to review their supervision of 15 finfluencers operating as authorised representatives and reminded them of their legal supervisory obligations.

Licensees that authorise finfluencers are expected to have adequate, documented arrangements in place to actively supervise their conduct, and to maintain records of that supervision.

In the media release relating to this communication, ASIC Commissioner Alan Kirkland said: “Licensees remain responsible and liable for what their representatives say and do online. We expect active supervision, not a set‑and‑forget approach.”

ASIC flexes its muscles on finfluencer crackdown

Chan explains that ASIC has numerous powers in its regulatory toolkit. It has broad information gathering powers under the Corporations Act 2001 (Cth) and the Australian Securities and Investments Commission Act 2001 (Cth), including to compel the production of documents and to require individuals to be examined by ASIC.

He says, “ASIC works with other government agencies when carrying out its functions and has an MOU in place with the Australian Federal Police with provisions relating to the sharing of intelligence. It also has an MOU in place with the Australian Financial Complaints Authority in relation to information sharing.”

ASIC has publicly stated it uses Artificial Intelligence to assist with enforcement and intelligence activities by analysing data from various sources and for intelligence gathering.

In December 2022, the Federal Court found social media finfluencer Tyson Robert Scholz contravened s911A of the Corporations Act by carrying on a financial service business (between March 2020 and November 2021) without an Australian financial services licence.

ASIC had alleged Mr Scholz was carrying on a financial services business by providing financial product advice, regarding share trading on the ASX, without a licence by:

• delivering training courses and seminars about trading in ASX-listed securities during which he made recommendations about share purchases
• promoting those courses and seminars on Twitter and Instagram using the handle ‘@ASXWOLF_TS’
• making share purchase recommendations on private online forums (that he administered) and on Instagram.

Chan says, “In the Scholz case, search warrants were executed under the Crimes Act 1914. A substantial part of the evidential material in the Scholz case was seized during execution of search warrants of Mr Scholz’s premises, car and person. Private group messages on WeChat were also held to be admissible into evidence in that case, which ultimately led to a finding that Mr Scholz engaged in unlicensed financial services business.”

In February 2024, ASIC obtained bankruptcy orders against Scholz for his failure to pay Federal Court costs of more than $450,000. Where a person becomes bankrupt, ASIC may also:

• cancel or suspend the person’s Australian financial services licence,
• make a banning order prohibiting the person from providing financial services, and
• cancel the person’s registration as a liquidator.

Last year, ASIC took action against 18 suspected unlawful finfluencers in the inaugural week of coordinated global action against finfluencers acting beyond their lawful remit.

The action was designed to address finfluencers who had presented themselves as self-designated trading experts, providing unauthorised financial product advice and promoting high-risk, complex investment products. ASIC was concerned these products included contracts for difference (CFDs) and over the counter (OTC) derivative products, both of which can carry enormous losses for consumers.

ASIC warned that finfluencers’ “social media content is often accompanied by misleading or deceptive representations about the prospects of success from the products or trading strategies they promote, sharing images of lavish lifestyles, sportscars and other luxury goods.”

Kirkland commented: “We are seeing a pattern where these unlicensed finfluencers invite consumers to join their closed communities or forums to learn their secrets to success or copy their trades.”

If a finfluencer is not licensed, an authorised representative or exempt, they’re legally not permitted to carry on a business of providing investment advice in Australia.

As a result of the ASIC action against those 18 finfluencers, several became authorised representatives, others amended their content or ceased targeting Australian consumers, and ASIC enhanced its scrutiny of offshore operators.

ASIC has previously taken action against licensees who have failed to maintain their licensing supervisory arrangements.

• In February 2026, ASIC cancelled the AFS licence of Pulse Markets Pty Ltd for, amongst other things, failing to take reasonable steps to ensure its representatives comply with financial services laws (26-027MR).
• In December 2024, Sanlam Private Wealth Pty Ltd accepted a Court Enforceable Undertaking following an ASIC investigation for failing to supervise its 113 representatives (24-290MR).

Financial product advice under the law

According to ASIC, “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”.

Finfluencers are permitted to share factual information that describes the features or terms and conditions of a financial product, or a class of financial products. The line is crossed when that finfluencer provides financial product advice, or conveys a recommendation on whether someone ought to invest, or not invest, in a particular product or class of products (unlicensed financial advice).

Finfluencers who receive benefits or payment for their comments regarding financial products are highly likely to be providing financial product advice because it indicates an intention to influence the audience.

Tips and budgetary advice that don’t recommend specific products or advice are typically lawful and do not veer into misleading or deceptive conduct.

ASIC has provided substantial examples of what is, or is not, misleading and deceptive conduct by finfluencers. One example, below, indicates a statement that is likely to be misleading. Claims are legally required to be substantiated, and risks thoroughly explained.

‘Holding onto this share in the long term will generate significant returns and is just like depositing your money with a bank!’

On the other hand, a statement such as ‘ETFs 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 since it gives equal prominence to risks and benefits.

AFS licensees need to do their due diligence

AFS licensees who use influencers may be liable for misconduct by the influencers they use if the influencer is acting as a ‘representative’ for the purposes of the financial services laws. There are obligations for the licensees in these circumstances, including ensuring influencers/representatives are adequately trained and complying with the financial services laws. In March 2022, ASIC warned licensees to “have sufficient compliance resourcing to monitor the influencers you use” and to “consider if you have engaged an influencer to promote a financial product that is subject to the design and distribution obligations and whether you have taken reasonable steps so that the influencer only promotes the product to consumers in the target market.”

Chan says, “Finfluencers face hefty penalties for providing unlicensed advice or dealing services in relation to financial products.”

Unless an exemption applies, carrying on a financial services business in Australia without being authorised under an Australian Financial Services Licence is a criminal offence and individuals face up to 5 years’ imprisonment and/or a fine of up to 600 penalty units/$198,000.

Chan says, “ASIC can also commence civil penalty proceedings. The maximum civil penalty for an individual is the greater of 5,000 penalty units ($1.65 million) or three times the benefit obtained/detriment avoided.”

Corporations face heftier penalties. Corporations face fines of up to $198,000 and civil penalties of up to the greater of: 50,000 penalty units ($16.5 million), or three times the benefit obtained/detriment avoided, or 10 per cent of annual turnover (up to $825 million).

Chan says, “Blurred lines between education, promotion and advice can confuse consumers and underscore the importance of identifying where the regulatory perimeter sits – when an activity crosses the perimeter it requires an Australian financial services licence unless an exemption applies.”