• The first conference showcasing Australia’s new crop of financial influencers has shone a spotlight on the emerging space.
• Creating finance and investment content for the next generation of investors, the disparate cast cover everything from personal finance to cryptocurrency analysis.
• While supporters claim the online education is a net positive, critics point out the dangers of providing unqualified financial advice to a group that may not be able to verify the information or the motivations behind it.
• Visit Business Insider Australia’s homepage for more stories.

Australia held its first financial influencer conference last week, shining a light on a world that has grown too big to ignore.

On Friday, the five-hour ‘investment conference’ organised by The Capital Network (TCN), a Sydney-based public relations business, brought together the eclectic mix of content creators and financial pundits who have come to occupy the rapidly expanding space.

The motley crew of guests saw TikTok producers, Instagram stars, vloggers, and podcast hosts present alongside financial regulators, university professors, investment analysts and ASX small-cap companies.

It exemplifies just how many voices have crept into the widening gap between traditional advice and the online world, when most are – for lack of a better term – financial influencers.

Many of them now preach daily to audiences that run into the six figures, on topics that range from the importance of a household budget to how to analyse a cryptocurrency. Between them, these various personalities casually offer a smorgasbord of financial know-how to a younger generation that either can’t afford or isn’t interested in traditional advice.

In this sense, the disparate group is filling a niche that has been previously unserviced. But critics are rightfully concerned that the reach and limitless scope of financial influencers, amplified via social media, threatens to harm a whole new generation of investors.

A diversity of views

Opening the event, TCN co-founder and former journalist Lelde Smits said the event had bumped up against resistance from within traditional financial service networks, but was focused on providing a wide array of voices.

“MarketLit has decided to confront these views head on and make it our mission to include as many diverse views as possible, old and young, experienced and new investors, women and men, stocks versus cryptocurrencies, and really local and international speakers,” Smits said.

“The scepticism and doubt over financial influencers or financial content creators were even more pronounced. While I’m glad to say these views were in the minority it was still alarming to see that we are really still in a society where there are people who think there are only certain ages or genders with certain qualifications and certain decades of experience [that] warrant a spotlight.”

On the question of diversity, Smits has a point. No one would argue that corporate Australia isn’t disproportionately white, middle-aged and male. MarketLit’s own lineup of company spokespeople marketing their own businesses to influencers and their audiences confirms the suspicion too. Many of them are TCN’s own clients, according to reporting in the AFR.

But misgivings about content creators giving unqualified financial advice online aren’t unfounded. Nor can concerns be written off as discriminatory and based only on the youth or gender of those creating the content.

Regulations that demand financial advisers in Australia hold certain qualifications have been in place for decades. This is not a cynical war on the young or the female, but an attempt to prevent the proliferation of bad financial advice.

‘Not financial advice’

These regulations prevent those without an Australian Financial Services Licence (ASFL) from providing advice in the first place. It’s the reason why the words ‘Not Financial Advice’ were emblazoned on MarketLit’s stream, and why the phrase has become something of a constant mantra for online creators.

It’s also why the conference began with a reminder that “this is not an investment conference providing financial advice”. Instead, TCN said it “asked our contributors to provide personal and professional insights into their careers, company or industry.”

A similar full screen disclaimer flashed up repeatedly during the stream, that “any advice is general in nature”.

As TCN correctly noted, it “cannot guarantee that statements made by contributors are reliable, accurate, or complete and that contributors may have direct holdings in the companies or investments they discuss.”

This is at the very heart of the debate around whether or not financial influencers ought to be regulated in Australia, given that no one can or will guarantee whether the information being churned out every day on social media is even accurate.

Instead, these financial influencers operate in a very opaque space, as the very first MarketLit conference speaker, ASIC’s Sommer Taylor explained.

“You might be getting information on something that is simply inaccurate, and those providing it they might have conflicted or vested interests. They may be paid to promote a certain product or idea,” Taylor said.

She pointed out out that social media channels also frequently promote outright scams and pump and dump schemes, and that it can be difficult for audiences to discern what is legitimate content and what is fraudulent.

Canberra doesn’t want to be a digital sheriff

The regulator is increasingly concerned about online financial content. It has previously revealed it monitors online forums and channels and has publicly appealed to Australians to dob in any creators who provide ‘unlicensed advice’.

As Smits revealed on Friday, representatives from ASIC and the ASX were among the first to sign up to the conference, as new investors flood into share markets and trade on the basis of memes as much as company fundamentals.

Yet it highlights another of the many contradictions that loom large the financial influencer community. While the regulator and financial establishment are eager to be proactive in a space that is growing far too quickly to ignore, the Morrison government has ruled out any kind of oversight.

Financial services minister Jane Hume said the government considers financial influencers to be a net positive, before dismissing the space as being no different to cab drivers offering stock tips.

But the key difference is not only that they have a ‘louder voice’, but that they are driven by very different incentives, and have a unique opportunity to profit from the information they share.

At the same time, some new investors appear to have developed a far greater risk appetite than previous generations, as ASIC sees more Australians engaging in short-term speculative trading.

Influencers form a broad church

Significantly – and unlike cabbies – the audiences of influencers are also fast growing and highly visible, so much so that it is difficult to imagine just how Canberra would filter the good actors from the bad.

There is, after all, a wide spectrum represented by this informal community. There are influencers flogging everything from crypto to luxury car loans online.

There are outright scams, dodgy financial products, and undisclosed sponsorship deals. There is r/WallStreetBets moving markets, and its Australian equivalent, r/ASXBets, discussing all manner of long shots.

MarketLit’s own lineup wasn’t immune from offering questionable advice, either. There were at least a few influencers on the bill who use their own platforms to talk ‘shitcoins’ – or cryptocurrencies that provide zero utility other than an opportunity to speculate.

Then again, there are also plenty who do provide well-meaning lessons to their followers. This cohort explains what inflation is, what ETFs stand for, and why most active investors can’t beat the market.

They teach the value of investing, the importance of future planning, and how to minimise risk – not just get-rich-quick schemes like their less honest peers.

It may not have been exactly the type of diversity that MarketLit was aiming to promote, but it is the one that ultimately matters the most.

The fact that this latter cohort has found large audiences online demonstrates a hunger for a financial education that young Australians aren’t getting and for advice that they perhaps can’t afford.

If nothing else, the conference did an excellent job of shining a light on a space that exists without anyone’s permission, that isn’t going away and that can’t simply be ignored.

Canberra and financial regulators might not want to open up Pandora’s box by regulating social media.

But given influencers and their advice run the gamut from the simple to the outright sinister, it’s an area that deserves a much more thorough interrogation.

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