Influencers must be licensed and regulated to give financial advice
Financial influencers who provide financial advice must be licensed and regulated, said Monetary Authority of Singapore (MAS) board member Alvin Tan in Parliament on Nov 13.
Also known as “finfluencers”, these influencers use social media to share tips and insights on finance-related topics, such as investing, saving and budgeting.
MAS expects financial institutions that employ finfluencers to advertise their products or services to ensure that these individuals present information in a clear and balanced way that highlights key features and risks, said Mr Tan.
The regulator has issued guidelines to make it clear that any individual who is remunerated for making a recommendation or expressing an opinion on the buying, selling or holding of investment products will be considered as providing financial advice.
“Even if he or she is not remunerated, he will be considered to have provided financial advice if he makes such recommendations or expressions regularly. Posting of general educational content is not financial advice,” added Mr Tan, who is also Minister of State for Trade and Industry, and Culture, Community and Youth.
He was responding to a question from Tanjong Pagar GRC MP Melvin Yong about regulation of the finfluencer sector and the number of complaints MAS has received against finfluencers.
Mr Tan said these influencers must be licensed and regulated under the Financial Advisers Act if they provide financial advice.
Over the past five years, MAS received an average of fewer than five complaints per year against finfluencers, he added. Most of these complaints concerned remarks made by finfluencers who were not providing any financial advice, and were therefore not subject to regulation by the authority.
MAS and the Commercial Affairs Department will take enforcement action against individuals providing financial advice without a licence. Enforcement action has been taken against six individuals, none of whom were finfluencers, over the past three years, said Mr Tan.
The growing popularity of financial influencers has raised concerns about the risks they may pose to consumers who follow them for advice.
Mr Yong said on Nov 13 that finfluencers hold significant sway over their fans, despite these influencers often stating that their words should not be construed as advice. He asked for MAS’ view on whether finfluencers have a duty of care to their fans in such situations, and whether there could be guidelines about due diligence required by finfluencers and consumers.
In response, Mr Tan reiterated that a finfluencer who provides financial advice will have to be appointed as a representative of a financial advisory firm.
“That said, we regularly advise the public to only deal with and invest through persons regulated by the MAS. We also list unregulated persons who may have been wrongly perceived as being licensed or authorised by MAS on our Investor Alert List,” he added.
Get The New Paper on your phone with the free TNP app. Download from the Apple App Store or Google Play Store now