Financial influencers must be licensed and regulated, says MAS board member

Financial influencers (Finfluencers) must be licensed and regulated under the Financial Advisers Act (FAA), said Alvin Tan, board member of the Monetary Authority of Singapore (MAS) and minister of state, ministry of trade and industry. 

Finfluencers are individuals who use social media to share tips and insights on finance related topics such as investing, saving and budgeting. 

Speaking in Parliament on 13 November, Tan said that MAS expects financial institutions who employ finfluencers to advertise their products or services to ensure that the finfluencers present information in a clear and balanced format that highlights key features and risks.

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At the same time, MAS has issued guidelines to clarify that any individual who is remunerated for making recommendation or expressing an opinion on buying, selling or holding of investment products will be considered as providing financial advice. 

Moreover, even if the individuals are not remunerated, they will be considered to have provided financial advice if they make recommendations or expressions regularly.

Posting of general education content is not financial advice, explained Tan. 

Over the past five years, the MAS has received an average of less than five complaints per year against finfluencers. The complaints, according to Tan, relates to remarks made by finfluencers who were not providing any financial advice and were not regulated by MAS. 

As such, MAS and the Commercial Affairs Department (CAD) will take enforcement action against individuals providing financial advice without a license. Enforcement action has been taken against six individuals, none of whom were finfluencers, in the last three years, said Tan. 

Tan was responding to a question by politician Melvin Yong, who asked whether MAS has received complaints against online finfluencers and whether the FAA 2001 will be reviewed to regulate the finfluencer sector. 

Speaking in Parliament, Yong said that finfluencers hold significant sway over their viewers. This is often despite these influencers often stating that their words should not be construed as financial advice said Yong. 

Calling finfluencers an "unregulated sector", Yong questioned MAS if finfluencers have a duty of care to their viewers when promoting financial products online and whether there could be guidelines about due diligence required by finfluencers and consumers. 

 In response, Tan reiterated that finfluencers who provide financial advice will have to be appointed as a representative of a financial advisory firm. 

“That said, we regularly advise the public to 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. I want to ensure that consumers who suspect any wrongdoing should lodge a complaint with MAS or the relevant financial advisory firm," added Tan. 

This comes at a time where 70% of Singaporeans have admitted to being influenced by recommendations from influencers or celebrities in their purchasing decisions. 

According to a 2024 study by eCommerce market intelligence company, Cube Asia, approximately 33.6% of Singaporeans follow a range of 1 to 10 influencers and celebrities regularly. Meanwhile, 31.8% indicated a broader engagement with 11 to 30 of them.

72% of surveyed consumers also cite authenticity behind their reasons to trust influencer recommendations, demonstrating how genuine and trusted recommendations are pivotal in shaping consumer behaviour, said the report. 

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