Continuing a series of recent actions taken by various financial regulators around the globe, Austria’s Finanzmarktaufsicht (FMA) has apparently decided to take a more gentle approach than some of its colleagues, announcing that it is beginning a dialogue with Austria’s Finfluencers.

The FMA said that Finfluencers – social media influencers focusing on financial issues – have become omnipresent on social media channels. They cover a broad spectrum: from general financial literacy or commentary about political and economic topics, through to specific recommendations to buy certain financial instruments. Finfluencers often make appearances as experts, sharing personal experiences, worldly wisdom, market analyses in an entertaining and easy to understand format.

Their popularity contributes to the further development of the conduct and decisions taken by retail investors, particularly younger ones. On the one hand, the FMA said that this approach provides many people with information on financial issues in an accessible form, but is also accompanied by particular risks for investors. For example, the dissemination of information that is incorrect, misleading or driven by their own interests, or frivolous recommendations for complex and risky financial products, or failing to mention their conflicts of interest, such as in the case that Finfluencers are being paid by providers for their recommendations. And that is without even mentioning fraud – in a concerted mission a few weeks ago supervisory authorities from around the world, led by the UK’s Financial Conduct Authority (FCA) put a stop to some criminals posing as Finfluencers.

So as noted above, the Austrian FMA has invited Austrian Finfluencers to Vienna for the first time to enter into dialogue with their community. In addition to a round of introductions by around 20 registered Finfluencers and the FMA’s experts from the Integrated Supervision and Financial Innovation and Securities Supervision departments the focus was on the legal framework that also applies in new social media channels. One aim is to raise Finfluencers’ awareness about the regulations that apply – particularly in the areas of investment advice and investment recommendations – to thereby prevent them from unwittingly breaching them. The FMA said it will also use the input received from this event and other observations of the market to address the issue of whether the current legal basis appropriately covers Finfluencers and their influence over retail investors and other market participants.

As we mentioned above, the FMA’s approach differs from that of some of the other regulators around the globe.

Australia’s ASIC recently issued warning notices to 18 social media Finfluencers, while the UK FCA earlier this month made 3 arrests, and sent 7 cease-and-desist letters in what it termed a Finfluencer crackdown. Last month the UAE’s SCA launched the region’s first Finfluencer license.