Up to 5 years in prison for unlicensed financial advice. Australia takes control of “financial influencers”
In Australia, financial influencers are extremely popular. They advise on investment, financial products and budget through social networks. Some of them even promise a significant return on investment. From now on, anyone who continues to counsel without a license for financial services can be imprisoned for up to 5 years. This is reported by Australian Securities and Investments Commission.
“When you discuss financial products and services online or promote affiliate links, make sure you understand your legal obligations. In particular, if you are providing financial product advice or arranging for your followers to deal in a financial product. If you carry on a business of providing financial services, you must hold an AFS licence (Australian Financial Services) license,” warns the commission.
The site also provides some examples of financial advice for which you need a license. This may be the message “I’m going to share with you five long-term stocks that will do well and which you should buy and hold”, because it is intended to influence someone’s decision to buy a particular product.
The commission has already sued financial influencer Tyson Scholz, who has gathered more than 22,500 subscribers on his Instagram account. He is accused of running a financial services business without a license. Scholz conducted training courses and seminars on ASX securities trading, advertising them on social networks.
In recent years, financial influencers have gained popularity in Australia, especially among young people. According to December poll, a third of Australians aged 18 to 21 followed the financial influencer online. 64% of young people admitted that they changed their economic behavior after listening to such an influencer.