Online Financial Product Influencers, Referrers & Discussion – Financial Services

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In this article, we look at the main issues that arise when AFS licensees work with referrers and influencers to distribute their products or services.

Who are the referrers and finfluencers?

Referrers are known by different names, in part depending on the specific industry they are in and the nature of the relationship – these include affiliates, referral partners and also include social media influencers ( or “finfluencers”) in different forms.

Recently released ASIC Fact Sheet 269outlining its point of view on finfluencers, their relationship with AFS licensees and their legal obligations.

Additionally, last year, ASIC noted in its Money and Youth – Survey Overview that about a third of 18-21 year olds follow a financial influencer on social networks and that 64% of young people say they have changed at least one of their financial behaviors as a result!

The legal questions surrounding referrers and finfluencers are therefore more topical than ever.

How do referrals work?

Guidance devices take a variety of forms. For instance:

  • certain AFS licensees may encourage referrers to promote their products through various channels, such as social media, video streaming and podcasts;

  • some AFS licensees may use third-party websites or mobile applications to display pop-up or banner ads about their products or services;

  • some AFS licensees hire referrers to display or transmit their marketing materials to consumers.

There are countless other examples.

Regardless of the model an AFS Licensee may use, AFS Licensees often set up unique affiliate/referral links for each referrer. They typically offer monetary rewards to referrers based on successful referrals measured by clicks or signups through these unique links. A key risk in all of these agreements is that the referrer may provide a financial service and may not be authorized to do so.

Risks of referents providing advice on financial products

The Companies Act 2001 requires a person carrying on a financial services business in Australia to hold an Australian Financial Services License or be the representative of an AFS license holder, unless an exemption applies. These financial services include the provision of advice on financial products.

But what is advice on financial products? The
Companies Act 2001 definition states that “financial product advice” means a recommendation or statement of opinion, which is intended to influence a person to make a decision about a particular financial product (or an interest in a particular financial product or class of financial products ), or which could reasonably be regarded as intended to exert such influence. It’s a very broad definition and more so, courts have taken a very broad approach when interpreting the definition of financial product advice.

It is very easy for an influencer to move into providing advice on financial products. For example, if an influencer says that a financial product “provides a great trading experience,” that would likely constitute financial product advice.

ASIC states in Fact Sheet 269 that if the referrer or finfluencer receives benefits or payment for their financial product reviews, they are more likely to provide financial product advice, as this indicates an intention to influence the public.

Pop-up or banner advertisements may also include or constitute financial advice, depending on the context in which they are displayed.

Risks that referents arrange to trade financial products

Referrers and licensees should also consider whether they are providing a financial service by “arranging” the sale of a financial product.

Arrangement refers to the process by which a person can bring into effect a negotiation of a financial product (for example, an issue, modification, assignment, acquisition or demand). Courts have taken a broad approach when interpreting “organizing” and what is meant by organizing.

Relevantly, ASIC provides an example in Fact Sheet 269, where they believe an finfluencer is likely to organize:

You are promoting a link allowing your subscribers to access an AFS licensee’s trading platform to trade financial products. It is a unique link that cannot be accessed anywhere else. You receive payment from the Licensee for each click resulting from the use of the Platform. People who access the link also receive an advantage when purchasing the products because of your unique link.

Your products may be configured differently, but in summary, regardless of the sponsorship agreements in place, it is always important for AFS licensees to assess whether their referrers provide financial services.

You’ll also need to make sure you’ve considered conflicting compensation laws and what that means for your model.

And once you’ve thought about conflicting pay, you’ll also need to consider secret commission laws.

Follow-up and supervision of referents

You should take steps to monitor the referrers and influencers you deal with.

Here are some key considerations when designing monitoring and supervision policies:

  • a due diligence process. Consider the following:
    • AFSL permissions that referrers have/do not have;

    • the credibility of the referees, including their background;

    • the communication or distribution channels of the referents with the end customers;

    • whether the values ​​of licensees and referrers align.


  • Consider how referrers will comply with design and distribution laws when distributing your financial products. How will you ensure that influencers only promote the product to the target market?

  • whether advice on financial products is provided by the referrers. If so, is the advice provided on behalf of an AFS licensee? Have they been duly authorized?

  • How will you track referrers, their activities, and the messages they send to consumers about your products?

Where to go from here?

If you are an AFS licensee and product issuer, chances are you have existing agreements with affiliates, introducing brokers, influencers, or other referrers. Some of these arrangements may have been in place for a very long time.

If you try to peek under the hood and see what your competitors are doing, it will probably be impossible to know exactly how their model works and if they have considered all of the above.

So there’s a benefit in stepping back and looking at your existing arrangements and thinking about how your model works, how it relates to the rest of your business, and the risks associated with it all.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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