Influencers warned not to give financial advice

Rob Everett, chief executive of the Financial Markets Authority. Photo / Supplied

Social media influencers and bloggers are being warned not recommend specific financial products amid concerns by the regulator that some may be straying into providing financial advice.

The Financial Markets Authority has released a guide on talking about money online aimed at social media influencers as well as tips for consumers who may come across people providing financial commentary online.

Rob Everett, FMA chief executive, said it was fine to talk about financial matters online as long as it was kept general.

"When you start getting into recommending particular products, like specific funds, stocks or insurance, or telling individuals what to do, that's probably regulated financial advice."

He also warned influencers to be wary of promoting high-risk products like cryptocurrency and derivatives.

"Not only do these assets have a high risk of people losing money, they're also often used as bait in scams."

Under the new financial advice law that came into effect in March, anyone who gives regulated financial advice to the public must either hold, or operate under, a Financial Advice Provider licence.

All providers of financial advice are subject to a Code of Conduct which requires them to act with integrity and place the interests of their clients first.

Those who are found to be giving financial advice but are not operating under a license could be held liable for a fine of up to $200,000.

Everett said influencers do not want to find themselves caught offering advice they're not qualified or authorised to give.

"It's also important for consumers to be wary of taking an influencer's recommendation that might not be suitable for them."

Influencers must disclose all paid and/or gifted posts in line with the Advertising Standards Authority and must moderate comments and act responsibly.

Tips for Consumers

• Be wary of what you see online. Some influences are paid to promote financial products or services. This should be properly disclosed - but may not always be.

• Some products promoted online - particularly cryptocurrencies and derivatives can be very high risk and they're often not suitable for general investors.

• If in doubt seek professional financial advice.

• If you think someone is improperly giving financial advice online, tell the FMA.