TLDR;
The BagHolder Pod discusses the recent news of the Monetary Authority of Singapore (MAS) sending warnings to five content creators for providing unlicensed financial advice. The podcasters share their initial reactions, discuss whether the names of the warned individuals should have been revealed, and debate the effectiveness of regulation in improving financial well-being. They also explore potential conflicts of interest among financial influencers and propose a code of conduct for content creators in this space.
- Initial reactions to MAS warnings
- Debate on revealing names of warned individuals
- Effectiveness of regulation
- Conflicts of interest among financial influencers
- Proposed code of conduct
Intro [0:00]
The episode begins with an introduction to the topic of influencer regulation and the recent warnings issued by MAS to five content creators for providing financial advice without a license. The hosts aim to share their thoughts on the matter, discuss the anonymity of the warnings, and debate whether regulation is the key to improving financial outcomes in Singapore.
Thoughts on influencer regulation [0:48]
The hosts discuss their initial reactions to the news, with some speculating on who the warned individuals might be. They highlight the ambiguity surrounding the criteria used by MAS to determine who receives a warning and what specific actions constitute unlicensed financial advice. Eric mentions that MAS defines financial advice as either promoting the buying and selling of specific investment products or personalizing advice to someone's financial situation. Bonti expresses interest in knowing the identities of those warned and the specific actions that led to the warnings, as this would help clarify the boundaries of what is permissible for financial content creators.
Should MAS reveal the names? [6:32]
The podcasters debate whether MAS should have revealed the names of the five individuals who received warnings. Bonti suggests that if MAS doesn't name the individuals, they should at least provide specific examples of the activities that led to the warnings. Seth compares the situation to a recent case involving a former male actor, where the anonymity led to widespread speculation and the irresponsible spreading of unverified information.
Would we be surprised if we received the letters? [8:22]
Kelvin states he wouldn't be surprised if he received a letter, acknowledging he has promoted crypto platforms in the past. He stopped this practice after realizing the impact of his sharing. He also stopped sharing his portfolio due to concerns about influencing others. Kelvin believes naming names could be weaponized, leading to frivolous reports based on personal feelings. Seth mentions he would be surprised to receive a warning because MAS had previously addressed complaints about his content. He also notes that his content focuses on credit cards and savings accounts, which are outside the scope of the Financial Advisers Act (FAA). Seth also points out the gloating and negativity in online forums, where users often give each other financial advice without being regulated.
Is regulation the key? [12:07]
The discussion shifts to whether regulation is truly the key to improving financial well-being, or if regulating a relatively small group of online creators is the most effective approach. Eric suggests that the reach of an influencer plays a role in whether they are targeted for regulation. He also raises the question of whether licensed financial advisors should be exempt from these regulations.
Conflict of interest [18:58]
Eric brings up the issue of conflict of interest, particularly among creators who sell courses, Patreon memberships, or one-on-one consultations. Kelvin argues that there is always a conflict of interest, whether creators earn from brands through sponsorships or from viewers through memberships and courses. He questions whether it's possible to have truly no conflict of interest.
Problem with regulation [23:53]
Seth expresses concern that relegating financial advice to only licensed advisors could be dangerous, as these advisors have an incentive to sell specific products. He suggests that if MAS wants to regulate, they should create a special financial influencer license, similar to what exists in Malaysia. Kelvin adds that being licensed doesn't necessarily make someone more credible or knowledgeable, but it does mean they are liable for things they should know not to do.
How would we adjust our content going forward [26:40]
The hosts discuss how they would adjust their content in light of the new regulations. Bonti says he is waiting for clearer guidelines before making any changes. Kelvin states that he has always tried to provide balanced opinions and disclaimers, but acknowledges that regulation alone cannot solve the problem. He believes better financial literacy is needed, and that the education system has failed in this regard. Seth finds it strange that the blame is being placed on online content creators when there are already safeguards in place through licensed financial advisors and regulated entities.
What would we propose to MAS [32:43]
The podcasters brainstorm what code of conduct they would propose to MAS. Eric shares suggestions from ChatGPT, including:
- Influencers can provide general financial education but not specific buy/sell recommendations.
- Disclosure and transparency of sponsored content and affiliate links.
- Accuracy and integrity, avoiding false or misleading claims.
- Influencers may not promote complex or high-risk financial products.
- Audience protection, not targeting minors or vulnerable groups.
- Competency and education, requiring influencers to complete a basic financial module.
- Complaint and enforcement mechanisms for audiences to report misleading content.
- Platform responsibility, requiring platforms to implement tools for tagging sponsored content and removing non-compliant content.
The hosts debate the merits and drawbacks of each suggestion. Seth argues for gatekeeping at the transaction level rather than restricting content creation. Eric uses an analogy of a radical religious group to argue for nipping high-risk product promotion in the bud. Kelvin suggests that MAS should spell out common-sense guidelines more clearly and provide more examples. Seth proposes that MAS should expand financial literacy efforts and clean up the behavior of regulated advisors.
Last words [53:28]
The episode concludes with the hosts summarizing their views on the MAS regulation and warning letters. They encourage viewers to share their thoughts in the comments below.