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Speaking on an episode of Broker Daily Uncut, Finni brokers Costa Arvanitopoulos and Robert Lee said that while there is a place for the responsible use of social media and artificial intelligence, both also pose a risk to borrowers, particularly younger Australians who may be new to finance.
“It’s not always wrong, but it doesn’t tell you the whole story, and that’s where people miss out,” Arvanitopoulos said.
“They’re getting 50 per cent of the information. Yes, that part is correct, but there’s X, Y and Z that comes with it.
“You need to ask the follow-up questions to understand the full picture.”
Lee said borrowers were increasingly arriving with preconceived ideas shaped by what they had seen online, often without understanding the lending nuances that sit behind broad financial claims.
“From our side at Finni, we’ve got a lot of clients with the same mentality: ‘My friend has this much serviceability, so why am I not getting the same?’ The reality is we’ve got more than 30 different lenders on our panel, and every lender has different calculators, constantly changing serviceability metrics, different appetites and different policies,” Lee said.
“Our job is to work out what fits that client’s particular needs and how we can maximise their borrowing capacity. It’s never going to be identical to the previous person we spoke to. That’s why it’s always better to go through a broker rather than directly to a bank, because a bank can only offer what it knows or what it can do – whereas we can see the whole picture and find what actually fits.”
ASIC ramps up unlawful finfluencer crackdown
The warning comes following the Australian Securities and Investments Commission (ASIC) decision to join 16 overseas regulators in a co-ordinated enforcement sweep targeting unlawful finfluencer activity, amid growing concern that younger Australians are increasingly relying on social media feeds and AI platforms for financial guidance.
As part of the crackdown, the corporate watchdog has issued warning notices to four finfluencers suspected of providing financial product advice without a licence or using misleading promotional tactics.
It has also launched a review into several Australian financial services licensees and how they monitor finfluencers operating under their licences.
The regulator’s surveillance has focused on online content promoting leveraged derivatives, share trading ideas, and exchange-traded funds, with ASIC commissioner Alan Kirkland warning that algorithm-driven platforms are often designed to maximise clicks and engagement rather than accuracy.
“What people see online is shaped by algorithms designed to drive clicks and engagement, rather than promoting accurate information,” Kirkland said.
“If media is promising easy money or guaranteed returns, there is a real risk they’re breaking the law.”
For brokers, those broader trends are already flowing through into day-to-day client conversations.
Arvanitopoulos said that he had clients who had sent him social media videos that gave out sweeping financial advice. He added that he had also seen borrowers place undue weight on highly curated online content when trying to assess whether a strategy was right for them.
“Just because they’re showing you a Ferrari or standing in front of a property doesn’t mean it belongs to them. I’m not saying they’re all like that, but ultimately, you shouldn’t be taking advice from people on TikTok,” Arvanitopoulos said.
Rentvesting gains traction with younger borrowers
That disconnect is also playing out in the growing popularity of rentvesting among younger Australians, as Gen Z borrowers look for alternative pathways into the property market.
Research from Great Southern Bank (GSB) shows this cohort is significantly more open to alternative strategies, with Gen Z respondents 50 per cent more likely than the average Australian to consider rentvesting (21 per cent compared with 14 per cent).
When it comes to motivation, GSB found Gen Z investors are primarily driven by generating rental income (36 per cent), entering the market sooner (22 per cent), and viewing property as a comparatively lower-risk strategy (17 per cent).
“Rentvesting is one I have seen a lot of on social media. I won’t name names, but there’s one influencer out there who pushes rentvesting as the holy gospel,” Arvanitopoulos said.
“When it comes to social media and taking advice, we’ve spoken about this before: you’ve got to take it with a big grain of salt. Just because someone’s got a phone and a TikTok account doesn’t mean they know anything.”
[Related: Reforms could drive investors out and worsen rental shortage, expert says]
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