Social media has become a popular source of financial information, with millions of Australians turning to online platforms for investment tips, budgeting advice and wealth-building strategies. While there is certainly valuable educational content available, the rise of financial influencers, commonly known as “finfluencers”, has also created new risks for consumers.
Recent action by the Australian Securities and Investments Commission (ASIC) serves as an important reminder that not all financial content shared online is regulated, accurate or appropriate for your personal circumstances.
The Growing Influence of Social Media
Research indicates that a significant proportion of younger Australians now rely on social media for financial information, with many placing considerable trust in content shared by influencers and content creators.
In response to growing concerns, ASIC recently issued warning notices to several social media influencers suspected of providing unlicensed financial advice, including promoting investment opportunities with claims of guaranteed returns.
While social media can be a useful starting point for financial education, it should never replace professional advice tailored to your individual circumstances.
Understanding the Difference Between Information and Advice
One of the most important distinctions for consumers is the difference between general financial information and personal financial advice.
Licensed financial advisers are authorised to provide recommendations that take into account your personal circumstances, financial goals, risk tolerance and objectives. They are legally required to act in your best interests and comply with strict professional and regulatory standards.
By contrast, social media creators may share general information, educational content or commentary on financial topics. However, unless appropriately licensed or operating under a licensed entity, they cannot legally provide personalised recommendations about specific investments, financial products or strategies.
Warning Signs to Watch For
When consuming financial content online, it is important to approach bold claims with caution.
Potential red flags include:
- Promises of guaranteed returns or risk-free investments.
- Pressure to act quickly before an opportunity disappears.
- Claims of easy money or rapid wealth creation.
- Recommendations to buy, sell or invest without understanding your personal circumstances.
- Content that minimises, ignores or fails to explain investment risks.
As a general rule, all investments involve some level of risk. Higher potential returns are typically associated with higher levels of risk, and anyone suggesting otherwise should be approached carefully.
Why Social Media Can Be Misleading
Social media platforms are designed to maximise engagement, not necessarily accuracy.
Algorithms tend to favour content that generates views, comments and shares. As a result, sensational claims and attention-grabbing headlines often receive greater visibility than balanced, evidence-based financial education.
This can create a distorted view of investing and financial success, where complex issues are oversimplified and risks are overlooked in favour of dramatic success stories.
There Is No One-Size-Fits-All Financial Strategy
Effective financial planning is highly personal.
Factors such as your age, income, family circumstances, existing assets, debt levels, investment experience and long-term goals all influence which strategies may be suitable for you.
A strategy that works well for one person may be entirely inappropriate for someone else. This is why personalised advice remains such an important part of making informed financial decisions.
Verify Before You Act
Before acting on financial information obtained online, take the time to verify the qualifications and credentials of the individual providing the information.
ASIC maintains professional registers that allow consumers to confirm whether a person or business is appropriately licensed to provide financial advice.
Licensed professionals are subject to ongoing education requirements, regulatory oversight and professional standards. They are also required to maintain appropriate insurance and participate in formal dispute resolution processes, providing additional protections for consumers.
The Bottom Line
Social media can be a valuable source of financial education and awareness, but it should be viewed as a starting point rather than a substitute for professional advice.
Before making significant financial decisions, ensure the information you are relying on comes from credible sources and consider seeking advice from appropriately qualified professionals who can assess your individual circumstances and objectives.
A cautious and informed approach can help protect your financial wellbeing and reduce the risk of costly mistakes. That’s why the team here at DFV are here to help!