Longo says ASIC has been working 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 per cent said they received their investing information from social media platforms such as Facebook, Reddit, TikTok and YouTube. ASIC recently cracked down on social media ‘finfluencers’ who had been providing unregulated financial advice through such channels, a move some warned could see useful money tips unnecessarily removed from the web.
Bitcoin and other cryptocurrencies proved popular with investors during the pandemic.Credit:Bloomberg
ASIC’s head of markets Calissa Aldridge said unregulated online financial advice would continue to be a point of focus for the market watchdog, but acknowledged the rise of social media advice was helping younger investors get a footing.
“We need to recognize that access to a broad range of channels and information has actually been, on the whole, helpful for investors. We’ve had lots of new entrants who have been able to quickly upskill and delve more deeply or more broadly into a range of products,” she said.
Angel Zhong, an associate professor of finance at RMIT, said the survey’s findings of investors’ heavy reliance on finfluencers and limited knowledge of consumer protections justified ASIC’s crackdown earlier this year.
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“However, as this survey was conducted last year, the effectiveness of the crackdown on finfluencers remains to be seen. Some finfluencers did do a good job in improving financial literacy in an engaging way,” she said.
“The absence of finfluencers, limited knowledge of inexperienced investors and lack of good information sources for investment may have an adverse impact on retail investors’ financial and mental wellbeing, especially during recent market crashes.”
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