Complaints against "finfluencers" who Dispense Financial Advice Online

18 Mr Melvin Yong Yik Chye asked the Prime Minister and Minister for Finance (a) in the past five years, whether MAS has received complaints against online "finfluencers" who discuss financial content; (b) if so, how many; and (c) whether the Ministry will review the Financial Advisers Act 2001 to regulate the "finfluencer" sector.

The Minister of State for Culture, Community and Youth and Trade and Industry (Mr Alvin Tan) (for the Prime Minister and Minister for Finance): Mr Speaker, "finfluencers" use social media to share tips and insights on finance-related topics, such as investing, saving and budgeting. The Monetary Authority of Singapore (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.

If finfluencers provide financial advice, they must be licensed and regulated under the Financial Advisers Act, or FAA. MAS has issued guidelines to clarify 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.

Over the past five years, MAS received an average of less than five complaints per year against finfluencers. Most of these complaints relate to remarks made by finfluencers who were not providing any financial advice and hence, were not subject to regulation by MAS.

MAS and the Commercial Affairs Department will take enforcement action against individuals providing financial advice without a licence. Over the past three years, enforcement action has been taken against six individuals, none of whom were finfluencers.

Mr Speaker: Mr Yong.

Mr Melvin Yong Yik Chye (Radin Mas): Thank you, Sir. I thank the Minister of State for his response. I think we can all agree that finfluencers do hold significant sway over their viewers. This is often despite finfluencers stating that their words should not be construed as financial advice. As an unregulated sector, consumers are at risk of hefty losses. I think in the United States, this was the case when finfluencers were promoting the FTX platform, which subsequently collapsed.

So, in such a situation, the consumers' only recourse would be pursuing a civil claim against the finfluencer. To my understanding, there has been no such precedence in our local courts.

Given this, I would like to ask if MAS do have a position on whether finfluencers have a duty of care to their viewers when promoting financial products online and then, in the same breath saying, "Please do not construe my words as financial advice".

Could MAS work towards a set of industry guidelines to provide both the finfluencers as well as consumers on their respective roles and responsibilities and the due diligence that each party should conduct? By doing so, I believe that we can continue to leverage on these influencers to grow our financial literacy among consumers and especially while safeguarding vulnerable consumers.

Mr Alvin Tan: I thank Mr Melvin Yong for his supplementary question. As I mentioned earlier on, only financial advisory firms and their representatives who are regulated under the FAA are allowed to provide financial advisory services on investment products. Therefore, 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. I want to assure the Member also that consumers who suspect any wrongdoing should lodge a complaint with MAS or the relevant financial advisory firms.

MAS will review reports of breaches or misconduct and take the appropriate regulatory action against the relevant parties found to have breached MAS's regulations, including providing financial advisory services without the appropriate licences or disseminating non-compliant advertisements.

12.30 pm

Mr Speaker: Order. End of Question Time. The Clerk will now proceed to read the Orders of the Day and Notice of Motion.

[Pursuant to Standing Order No 22(3), provided that Members had not asked for questions standing in their names to be postponed to a later Sitting day or withdrawn, written answers to questions not reached by the end of Question Time are reproduced in the Appendix.]