KUALA LUMPUR: Their videos promise financial freedom in minutes, their advice often shared more widely than that of licensed experts and, in some cases, heavily influences how Malaysians manage their money.
These financial influencers or “finfluencers” — online personalities who turn complex financial topics into trending reels — have long dispensed money tips, investment opinions and “wealth hacks” across social media without the guardrails that govern licensed professionals, until now.
In response to the growing presence of financial influencers and the widespread use of technology, a new guideline governing advertisements for capital market products and related services took effect on November 1.
First issued by the Securities Commission Malaysia (SC) in 2020, the revised guideline is meant to level the playing field — ensuring that finfluencers who share investment advice are held to the same standards as those licensed under securities laws.
Malaysian Financial Planning Council (MFPC) International Development Committee chairman Anuar Shuib said many so-called financial “gurus” had been sharing potentially unreliable and unsubstantiated information with consumers before the guideline came into force.
“The thing is that when they become finfluencers, there are implications to the Malaysian public, that’s why they need to be regulated because it is a sensitive area,” he told Malay Mail recently on the sidelines of the “Are Malaysians Financially Literate?” panel session held at Sasana Kijang here.
“Because when you are sharing about personal finance, it’s not just for fun,” Anuar said. “It can lift a person up, bring them down, or even destroy their wealth.”
He said this is precisely why efforts by regulators such as the SC — including measures like licensing requirements under the Capital Markets and Services Act — are essential to ensure those peddling harmful financial advice are held fully accountable under the law.
The guideline, he added, was a step that had been overdue for some time.
Under the guideline, finfluencers are regarded as voluntary advertisers and are prohibited from promoting capital market products and related services, including financial planning, unless they are licensed by the SC.
Failure to obtain a licence or registration from the SC is a punishable offence under the law and one can be fined up to RM10 million or jailed for up to 10 years or both.
While consumers remain free to choose the content they wish to follow, Anuar stressed that it is essential to verify whether a finfluencer is authorised by the SC before acting on any personal finance advice.
“One cannot generalise the situation with everybody and personal financial management that is typical to a particular individual may not apply to others,” he said.
MFPC deputy president Phang Kar Yew echoed Anuar, saying the guideline is designed not to restrict the dissemination of information but to ensure a level playing field where credible, client-centred advice prevails and consumers can make well-informed financial choices.
“Being licensed is one thing, but licensed individuals must also be mindful of what they share publicly, as giving financial advice comes with a duty of care,” he said.
The guideline clarifies that it does not cover the dissemination of factual information about a capital market product for educational purposes, as long as the information is not intended, and is unlikely, to influence anyone to act on or take a position in relation to that product.
Among others, the guideline also requires an advertisement to be presented in a manner that allows consumers to immediately identify it as an advertisement. - Malay Mail
According to Phang, this ensures that the content is limited to general advice, covering the dos and don’ts of the financial markets in a strictly educational context.
“We at MCPF obviously support this (guideline) because we want to play within the rules for a healthier ecosystem where it enables stakeholders to take industry-wide responsibility in defining standards for their members,” he said.
