ASIC to crack down on financial influencers

ASIC released its corporate plan for 2022-25 on Thursday, flagging a new investigatory project focusing on social media advice and its influence on retail investment decisions.

The news came following concerns from the industry and federal opposition that affordability issues in advice were pushing more consumers towards social media spruikers, despite the financial services minister saying it was not in the government’s purview to regulate the online space.

In the plan, ASIC said it would “expand monitoring of social media platforms and moderators to facilitate early detection of unlicensed advice and research”.

In addition, the regulator said it planned to engage with providers in the social media space to “drive behavioural change, monitor unlicensed activity and educate retail investors”.

The new project is ranked as a level 1 in ASIC’s list of strategic priorities, which identify “threats and behaviours that lead to harm” and prioritise “harms that need to be addressed”.

ASIC also released its statement of intent alongside the government’s new statement of expectations for the regulator on Thursday, which effectively jettisoned ASIC’s “why not litigate” mandate in favour of a more flexible and business-friendly regulatory approach to support economic recovery from COVID.

However, the regulator’s corporate plan indicates little change in terms of the share of resources devoted to surveillance and enforcement of financial services laws as compared to education, with 53.5 per cent of ASIC’s “estimated effort by activity” for the 2022 year planned to be devoted to enforcement.

A further 26.4 per cent was allocated to supervision and surveillance, with 4.5 per cent to stakeholder engagement, 3.3 per cent to guidance and just 0.2 per cent to education.