SINGAPORE – The Monetary Authority of Singapore (MAS) is taking significant steps to regulate financial influencers, commonly referred to as "finfluencers," who offer financial advice through social media platforms.

During a parliamentary session on November 13, MAS board member Alvin Tan emphasized the necessity for these individuals to be licensed and regulated in order to safeguard consumer interests.

Finfluencers, who often share investment tips, saving strategies, and budgeting insights, have gained considerable traction in recent years. With their vast reach and influence, concerns have arisen regarding the potential risks they pose to unsuspecting consumers who may rely heavily on their recommendations instead of qualified financial advice.

The Responsibilities of Finfluencers

In his remarks, Mr. Tan explained that MAS expects financial institutions utilizing finfluencers for promotion to ensure these individuals deliver information in an unbiased, clear manner, promoting key features and associated risks of the products or services offered.

He clarified that anyone compensated for making recommendations regarding investment products is deemed to be providing financial advice, thus triggering the need for licensing under the Financial Advisers Act.

Ethical Considerations in Financial Advice

Mr. Tan was responding to inquiries from MP Melvin Yong, who highlighted the impact finfluencers have on their followers, despite frequently disclaiming that their content should not be interpreted as professional advice. This brings into question the ethical responsibilities these influencers hold toward their audience.

Formal Appointment as Advisors

Addressing these concerns, Mr. Tan asserted that finfluencers providing financial advice must be formally appointed as representatives of a licensed financial advisory firm.

He remarked, "We regularly remind the public to engage only with individuals regulated by the MAS to ensure they receive credible advice."

Current Grievance Landscape

Interestingly, the MAS has recorded a low volume of grievances regarding finfluencers, averaging under five complaints annually over the last five years.

Most of these complaints were related to individuals who were not actually providing financial advice and consequently fell outside of MAS's regulatory framework.

Preparedness for Action

Nonetheless, MAS, in collaboration with the Commercial Affairs Department, is prepared to take action against anyone offering unlicensed financial advice, having already enforced measures against six individuals over the past three years.

The Future of Finfluencers and Consumer Protection

The surge in finfluencer popularity and its implications for consumer protection cannot be overlooked. With many seeking guidance on personal finance through social media, it is critical for regulatory bodies to adapt and create a framework that ensures safe and responsible dissemination of financial advice.

As the industry evolves, it will be essential for both consumers and influencers to understand the importance of due diligence.

Conclusion

The conversation around finfluencers is just beginning, and with the MAS actively considering guidelines and protections, we could soon see significant changes in how financial advice is shared online.