May 2022

Over the past few years there has been an increasing trend of FinFluencers being used to market financial products. In this marketing grey area, social media influencers use their broad reach to promote retail investment and trading products. Even celebrities are getting in on the act, with some high-profile influencers skirting quite closely to offering financial advice especially in the booming area of retail trading in crypto and NTF products. FinFluencers are increasingly being used to promote and target a younger demographic, with a recent ASIC survey suggesting that 64% of young people have changed their financial behaviour because of an influencer. Many of the FinFluencers with large numbers of followers in Singapore, HK and Australia will promote a range of fashion, lifestyle and financial products – so the marketing of financial products by influencers can appear subtle and integrated. Further, many influencers reside in one country but may promote content or products in another so social media allows influencers to promote products freely across borders and, indeed, across the globe.

As you would expect, the regulators are all closely watching the rising impact of FinFluencers, especially when it comes to offering riskier investments in crypto or derivative products. In Australia, ASIC has recently introduced guidelines for influencers promoting financial products, as has the FCA in the UK. Additionally, the Monetary Authority of Singapore [MAS] last year issued revised guidelines for FinFluencers, who now need to ensure they abide by clear rules to not offer financial advice to their followers. This is quite a new area, and its regulation and compliance in this space is evolving.

In a way, the prevalence of social media combined with the rise of retail crypto trading has created a unique situation where a younger audience is being sold the prospect of ‘get rich quick’ investments via social platforms such as TikTok and Instagram. As such, the regulators are suitably watching the space closely to ensure that especially young, impressionable consumers understand the risks of speculative trading products, and also to set clear guidelines for FinFluencers to ensure they know when they are offering direct financial advice. So FinFluencers appear to be here to stay, with regulators attempting to keep up as best as they can.