ASIC warns influencers and AI are shaping risky Gen Z investing habits

The survey of 1,127 Australians aged 18 to 28, conducted between Nov. 28 and Dec. 10, found that 30% turn to YouTube and 18% use AI platforms for finance content. ASIC reported high trust in sources that may prioritize engagement over accuracy.

Trust levels were elevated across several channels: 56% somewhat or completely trust financial information on social media and 52% express the same for finfluencers. AI ranked as the most trusted source at 64%.

Crypto ownership is common in the group at 23%. Among those crypto holders, 29% trade based on social media or influencer content. ASIC warned that such content can set unrealistic expectations about returns and underplay volatility and the demands of long-term investing.

“We’re conscious that there’s a lot of marketing activity on social media to encourage crypto investment, and our work has shown some that is actually encouraging people to invest in scams,” ASIC Commissioner Alan Kirkland noted. “It’s really important for people to be aware of those risks, because you don’t see that same volatility in other types of investments and often that volatility is driven by forces that it’s impossible for an individual sitting in Australia to understand.”

Kirkland also raised concerns about retirement savings. He said people are often drawn in by social media ads that push them to switch their superannuation (retirement savings). Because super is usually their largest asset, he warned, bad actors target it, and the results can be costly if people are steered into risky investments.

ASIC is closely watching how AI tools are used to produce financial information. “It is clear under Australian law that if any entity is giving financial advice, they need to be licensed. So if an AI tool, whoever’s providing it, is actually making recommendations about individual financial products, taking into account individual circumstances, that would be personal advice, so it needs to be licensed,” Kirkland warned.

In June, ASIC issued warning notices to 18 influencers suspected of unlawfully promoting high-risk financial products and providing unlicensed advice.

Recently, the Australian Senate backed a bill that would treat crypto platforms and tokenized custody as financial products, requiring an Australian Financial Services Licence and allowing a six-month transition.