FinTok and Dogecoin influencers

“The TikTok influencer spruiking Nokia is not that different to the bloke down at the pub who wants to tell you all about the really great company he just invested in – but with a much louder voice.

“This isn’t financial advice, but as has been the case since taxi drivers started giving stock tips, it is an inevitable part of a financial ecosystem.

“Some of the information and opinions that consumers receive from online forums will be bad. But some of it will be good. And a lot of it will better engage younger generations in investment and financial markets.

“A TikTok influencer is Generation Z’s Paul Clitheroe or Scott Pape.”

Senator Hume acknowledged that sometimes this would result in losses.

“And while it is frustrating for investment professionals to watch, at some point we have to let people make their own decisions … It’s about personal responsibility and common sense,” she said.

The comments appear at odds with concerns raised by the corporate regulator about misinformation and unlicensed investment advice online, and its impact on a growing cohort of young traders.

The Australian Securities and Investments Commission last year said it had detected an increase in social media content aimed at unsophisticated retail investors and home to unmoderated commentary on markets and investing.

ASIC shocked the market 12 months ago when it found retail accounts were being created at 3.5 times the normal rate, confirming the Robinhood phenomenon in foreign sharemarkets had come to Australia.

Dogecoin? ‘I won’t stand in your way’

The government’s laissez faire approach also extends to new asset classes such as cryptocurrency – even the hype-driven, meme-inspired, Twitter- fuelled, Elon Musk spruiked Dogecoin.

“I would like to make something clear: cryptocurrency is not a fad. It is an asset class that will grow in importance,” Senator Hume said.

If you want to invest in Dogecoin, I won’t stand in your way. Personal opportunity and personal responsibility are two sides of the same coin.”

Likening the government’s approach to unsophisticated retail investors as letting everyone have a crack at climbing the mountain, Senator Hume rebuffed the idea of increased regulation which would restrict new market entrants, labelling any such move as a “nanny state” alternative.

“The fact that some people make poor decisions does not justify restricting the ability for ordinary Australians to participate in investment,” she said.

“If we see some people lose money and use this to justify onerous restrictions on the bulk of Australian consumers, we exclude them from the benefits of capital growth that go hand in hand with economic growth.”

But like investment in any asset class, “they are subject to Australian law, including our market conduct, know-your-client and tax laws. It is not a free pass,” she said.

The value of the cryptocurrency market plunged 23 per cent over the last five days, with with the market capitalisation for all crytocurrencies falling from $US2.5 trillion to $US1.7 trillion, according to CoinMarketCap.

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