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Reaching massive audiences with a single post, financial influencers ("finfluencers") are changing how Canadians make investment decisions.
In a recent survey by the Ontario Securities Commission (OSC) of 655 Canadian retail investors, over one-third reported making a financial decision based on advice from a finfluencer, highlighting the intersection between digital influence and financial regulation. Many finfluencers are monetizing their platforms through brand partnerships, including deals with financial and investment firms.
As the OSC and Canadian Securities Administrators (CSA) increase scrutiny, a central challenge for both finfluencers and regulators is defining when online content crosses into regulated activity. Finfluencers must navigate risks tied to brand partnerships and public perception, as a single misstep can quickly escalate into reputational or legal consequences.
In addition to securities law obligations, finfluencers and the brands that engage them must also comply with Canadian advertising laws, including "material connection" disclosure requirements triggered when a finfluencer receives a benefit for endorsing something, such as an investment product or service.
As this space continues to evolve, it's worth first understanding who qualifies as a finfluencer and how their online activity fits into Canada's regulatory framework.
What is a "finfluencer"?
The term "finfluencer" describes content creators who provide financial advice, investment tips, or promote investment products across social media platforms. These creators can range from registered advisers and promotional partners to unregistered individuals sharing their personal experiences with financial products.
Finfluencers differ from traditional financial advisers through their ability to reach large audiences quickly and engage with followers in a personal and digestible way. Engagement and accessibility drive finfluencer popularity, yet they are also the source of regulatory concern. The OSC conducted a review of 87 finfluencers and nine issuers that had engaged them for promotional purposes. The review revealed varying levels of accuracy and reliability, with certain finfluencers found to be offering unregistered investment advice and others disseminating misleading information.
Finfluencers have the potential to make financial literacy more attainable and mainstream. However, social media can amplify both reliable guidance and risky, misleading advice, making it difficult for investors to discern which they are receiving.
Registration requirements and securities law implications
Influencers working in the financial space need to be mindful of the potential application of Canadian securities laws. The main securities regulatory challenge is maintaining engaging, persuasive content while remaining within the legal boundaries, including obtaining necessary licensing or registration.
Considering only Ontario securities laws, Section 25 of the Ontario Securities Act (OSA) requires that anyone carrying on or holding themselves out to be engaging in the business of trading, advising on, or managing securities must be registered unless a specific exemption applies. This provision warrants particular scrutiny by finfluencers. Whether a finfluencer is "in the business" of advising is a nuanced question and depends on how the finfluencer holds themself out to third parties and potential clients, and how they earn compensation (if any), among other factors.
As a general rule, a finfluencer advising on investment activities regularly and repeatedly as part of their business offering should assume that OSC registration is required absent an applicable securities law registration exemption.
Section 34 of the OSA carves out an exemption for advisers who provide general advice that is not tailored to the recipient's specific needs. Pure financial planning or general advice that does not recommend or intermediate specific securities may fall outside the registration requirements.
However, labeling content as "general guidance" or "educational" will not exempt it from registration if, in substance, it is tailored or promotional. Online finfluencers should be cautious about providing recommendations to specific demographic groups, as this could be construed as providing personalized advice. General advice aimed at a broad, undefined audience is likely within the safety net of the Section 34(1) exemption. Posts that encourage followers to buy, sell, or hold specific securities, link to trading platforms, or share model portfolios may be considered customized advice that triggers registration requirements.
Importantly, what constitutes a security is quite broad and includes individual stocks and bonds (whether publicly issued or private placements), fund investments, and crypto or digital assets.
Advertising law overlay: Ad standards influencer disclosure
In parallel with securities law, finfluencers and the brands or entities that retain them to endorse their products or services must comply with Canadian advertising laws, including "material connection" disclosure requirements.
The Competition Bureau and Ad Standards (Canada) require disclosure of any "material connection" that could affect the weight or credibility of a finfluencer's endorsement. A "material connection" includes any form of compensation or benefit, monetary or non-monetary, provided to a finfluencer, such as payment, free or discounted products or services, affiliate commissions, referral fees, bonus credits, preferential access, and gifts. Where a finfluencer has a "material connection" to a product or service they endorse, that "material connection" must be clearly and prominently disclosed in each piece of content that includes such an endorsement.
Disclosure must be presented in a manner that is both easy to notice and easy to understand. It should be placed upfront and not buried in a block of hashtags, in a profile or bio, or behind a "more" link. The disclosure should appear before or at the beginning of the endorsement content so that consumers see it when they first engage with the content.
For specific examples of appropriate "material connection" disclosure per type of content (static post, video, stories, etc.), please see the Ad StandardsInfluencer Marketing Disclosure Guidelines.
Finfluencer compliance
While some finfluencers are registered investment professionals, others are non-registered influencers who partner with registered firms to promote investment products or services. In both cases, satisfying regulatory and "material connection" disclosure obligations are essential to protecting investors and upholding the finfluencer's credibility.
Unregisteredinfluencers:
For influencers hired by registered firms to promote their products, the need for clarity and accountability is paramount. All communications should be fair, balanced, and not misleading. Promotional content must clearly disclose any "material connection" with the product or service they endorse.
Content should remain educational and general. Posts that imply or encourage followers to buy, sell, or hold an investment risk being viewed as advice requiring registration. Compensation tied to follower trades or account openings can also trigger registration obligations. Finally, finfluencers should refrain from making statements that imply guaranteed returns or unrealistic outcomes.
Registered firms hiring influencers:
When a registered firm partners with an influencer to promote its products, the influencer's content is treated as a firm communication. Registered firms should review and monitor influencer posts for accuracy and compliance before publication. Firms and influencers should also implement clear approval processes, "material connection" disclosure standards and policies. Contracts should include explicit "material connection" disclosure requirements, approval rights, and indemnities to manage legal risks and maintain a professional image.
Registered influencers:
An adviser providing general advice is likely exempt under Section 34(1) of the OSA. However, an investment professional providing specific advice must continue to meet their obligations as a registered adviser. Registered professionals must be careful to uphold their Know-Your-Product and Know-Your-Client suitability obligations and other requirements of their ongoing registration. Any material conflicts of interest must be identified and addressed in the client's best interests, while ensuring no misleading or untrue statements are made.
Enforcement
It is important that finfluencers and brands adhere to securities laws and advertising laws as penalties for non-compliance may include heavy fines, trading bans, disgorgement orders, or even criminal charges.
Regulators have issued multiple news releases highlighting the risks related to finfluencer content and paid partnerships. Canadian laws, including securities and advertising laws, have broad potential reach, encompassing not only trading or advising activity aimed at Canadian audiences by Canadian or foreign finfluencers, but also content originating from Canada with global reach.
Posts accessible to Canadian audiences through geo-targeted ads, domestic pricing, or Canada-specific promotions, will generally trigger a requirement to comply with Canadian laws even if the finfluencer is located outside Canada. Both finfluencers and brands should evaluate the reach of their audience and consider geo-restricting or disclaiming content to help limit unintended regulatory exposure.
Conclusion
For finfluencers, compliance is not just about satisfying regulators. It is about sustaining audience trust, brand relationships, and long-term viability in the digital creator economy. In the fast-moving world of social media and celebrity-driven promotion, regulatory adherence ensures that audiences can confidently rely on the guidance they receive, while finfluencers and brands mitigate legal and reputational risks.
Compliance with securities and advertising laws is not merely a legal safeguard, it is a mark of credibility in an industry where trust drives both influence and investment.
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