The corporate regulator has warned social media influencers and licensees who engage them against breaking financial services laws, adding enforcement actions will be taken if contraventions are found.

The Australian Securities and Investments Commission (ASIC) made the comments after a survey it conducted last year found that 33% of consumers in the 18-21 age group follow at least one financial influencer on social media.

The survey found a further 64% of young people reported changing at least one of their financial behaviours as a result of following a financial influencer.

“ASIC monitors select online financial discussion by influencers who feature or promote financial products for misleading or deceptive representations or unlicensed advice or dealing,” Commissioner Cathie Armour said.

“If we see harm occurring, we will take action to enforce the law.”

Ms Armour says the way investors access information is changing, making it crucial that influencers who discuss financial products and services online comply with the financial services laws.

“If they don’t, they risk substantial penalties and put investors at risk,” Ms Armour said.

Last week ASIC issued an information sheet outlining how the law applies to social media influencers and the licensees who work with them.

ASIC says Australian financial licensees should be aware of their obligations as they may also be liable for any misconduct by the influencers they engage.

Licensees must do their due diligence and put in place appropriate risk management systems and monitoring processes to make sure their influencers are not providing unlicensed financial services, ASIC said.

The regulator also urged licensees to consider if their influencers are subject to the design and distribution obligations regime and whether they have taken reasonable steps to ensure the influencers only promote the product to consumers in the target market.

Click here for the information sheet.