Over the past decade, personal finance advocate Ms. Dawn Cher, widely recognized as SG Budget Babe, has captivated over 30,000 followers on social media platforms like Instagram and YouTube. Her follower count surged significantly after the pandemic, as more Singaporeans sought to gain control over their finances amidst economic uncertainty.

However, recent parliamentary discussions have ignited a crucial debate about the regulation of financial influencers—often referred to as "finfluencers"—in Singapore. A crucial question arose: Should these individuals, who share financial tips and insights, operate under the purview of the Financial Advisors Act (FAA)?

Minister of State for Trade and Industry Alvin Tan, who serves as a board member of the Monetary Authority of Singapore (MAS), indicated that financial influencers providing advice would indeed need to be licensed and regulated in accordance with the FAA. Interestingly, the MAS has noted that they receive fewer than five complaints annually regarding finfluencers, most of which pertain to individuals mischaracterizing their advice rather than genuine financial guidance.

The Risks of Unchecked Financial Advice

In a world increasingly reliant on social media for information, the Consumers Association of Singapore (CASE) is stepping up its efforts to alert consumers about the potential dangers posed by unregulated finfluencers. CASE President Melvin Yong emphasized that consumers face substantial financial risks if they blindly follow poorly informed advice or promotional content related to finance.

Mr. Yong's parliamentary inquiry on the need for regulatory oversight highlighted the substantial influence allocated to these finfluencers. He urged that greater scrutiny is necessary, especially as many finfluencers imply expertise while clarifying their content does not constitute financial advice.

Defining Financial Advice

To aid in distinguishing between casual content and legitimate financial advice, the MAS has clarified the criteria by which finfluencers' activities may be regulated. The assessment includes whether the influencer intends to persuade followers regarding financial products or if their discussions are merely opinion-based. If the influencer can be deemed as offering structured and systematic advice, they must obtain the requisite licensing.

Concerns Among Finfluencers

Following the parliament session, finfluencers like Ms. Cher voiced their concerns about potential impacts on their partnerships with brands. The uncertainty has resulted in sponsors retracting their collaboration offers, creating anxiety in the community over the sustainability of their careers in the evolving regulatory landscape.

"We need to understand if we are crossing into the territory of requiring licenses and how that impacts our work with brands," Ms. Cher noted. Despite the regulations, she maintains that her content primarily serves to provide educational insights rather than direct financial consultation.

Enforcement Perspective

Interestingly, enforcement actions taken by MAS in recent years have not targeted any finfluencers. Instead, six individuals found operating without a license were from different segments of the financial industry. Insurers and financial practitioners, recognizing the risks posed by misleading financial advice, are advocating for a more regulated environment where finfluencers are licensed to ensure their accountability.

Conclusion: A Call for Better Practices

While finfluencers play a vital role in fostering financial literacy and democratizing financial knowledge, the call for accountability and regulation from reputable sources like CASE and MAS is critical to safeguarding the interests of the public. It is a delicate balance that must be maintained to ensure that the rise of finfluencers contributes positively to the financial landscape without exposing consumers to undue risks.

In these transformative times, the collaboration between finfluencers and regulatory bodies will be essential in creating a trusted and informed community around personal finance.