Longo says ASIC has worked closely with the government on new regulations, including the issue of unregulated financial advice provided online, which has become a popular source of information for new investors.
Of those surveyed, 41% said they received their investment information from social media platforms such as Facebook, Reddit, TikTok and YouTube. ASIC recently cracked down on social media “finfluencers” who provided unregulated financial advice through these channels, a move some in the know could see helpful money advice unnecessarily removed from the web.
Calissa Aldridge, head of markets at ASIC, said unregulated online financial advice would continue to be a focus for the market watchdog, but acknowledged the rise of social media advice was helping young investors to gain a foothold.
“We have to recognize that having access to a wide range of channels and information has been, overall, helpful for investors. We had a lot of new entrants who were able to quickly improve their skills and delve deeper or broadly into a product line,” she said.
Angel Zhong, an associate professor of finance at RMIT, said the survey’s findings of investors’ heavy reliance on finfluencers and limited awareness of consumer protection justified ASIC’s crackdown earlier this year.
“However, as this investigation was conducted last year, the effectiveness of the crackdown on finfluencers remains to be demonstrated. Some finfluencers have done a good job of improving financial literacy in an engaging way,” she said.
“The absence of influencers, the limited knowledge of inexperienced investors and the lack of good sources of information for investing can negatively impact the financial and mental well-being of retail investors, especially during recent crashes. fellows.”
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