To address concerns about “finfluencers” giving financial advice on social media, New Zealand’s Financial Markets Authority (FMA) is providing guidance that aims to prevent registration violations and investor harm.
The FMA said that anyone who provides financial advice must be registered and follow a code of conduct, yet it’s concerned that unregistered social media influencers and bloggers are crossing the threshold.
The new guidance aims to clarify when talking about investing can stray into providing advice. It also stresses that paid posts should be disclosed and that comments should be moderated.
“Influencers do not want to find themselves caught offering advice they’re not qualified or authorized to give,” said Rob Everett, chief executive of the FMA, in a release.
“It’s also important for consumers to be wary of taking an influencer’s recommendation that might not be suitable for them,” he added.
The regulator said that while general financial discussions are usually fine, recommending particular products crosses into the territory of regulated advice.
“We’re also reminding 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,” Everett said.
The FMA warned investors to be aware that influencers may be being paid to promote financial products or services, and that online financial content “attracts scammers, including scam bots.”