The market regulator has come out with a set of dos and don'ts for "influencers" - people who dish out financial advice on social media but are not legally entitled to do so.
Bitcoin and other cryptocurrencies are usually unsuitable for general investors, the FMA says. Photo:
The Financial Markets Authority's guide to talking about money online offers tips for consumers as well as rules for influencers.
"It's usually fine to talk about financial matters online as long as you keep it general," FMA chief executive Rob Everett said.
"When you start getting into recommending particular products, like specific funds, stocks or insurance, or telling individuals what to do, that's probably regulated financial advice."
Only someone with a Financial Advice Provider Licence can legally call themselves a financial adviser or act like one.
The guidelines urge people to be wary of what they see online as some influencers were paid to promote financial products and services, while products promoted from overseas sources might not be covered by laws and regulations.
"The participation of retail investors has increased significantly over the past 18 months and social media was a component of that," Everett said.
Some products considered particularly high risk include cryptocurrencies, such as Bitcoin and derivatives, which were often not suitable for general investors.
"Not only do these assets have a high risk of people losing money, they're also often used as bait in scams," Everett said.
The guideline said influencers should follow social media best practice by disclosing all paid and gifted posts, which was in line with the Advertising Standards Authority code, as well as moderate comments and act responsibly when dealing with vulnerable consumers.
More information is available on the FMA's [www.fma.govt.nz website.]
