Be careful about personal and professional posts, says aggregator
Social media is a crucial tool for most mortgage brokers to help drive success but one of Australia’s largest broker aggregators is also warning of the pitfalls and potential legal ramifications if you get it wrong.
Brokers are increasingly using social media platforms such as Linkedin, X, Instagram, Facebook and even TikTok to educate their customers, drive engagement and reach out to potential new clients.
Daniel Oh (pictured above), the group legal counsel at Connective, who is in charge of legal risk and compliance, said social media use had “exploded” since the COVID pandemic.
“More and more of our brokers are appreciating the power and reach of social media, rather than just the old form of word-of-mouth referrals or hosting the sausage sizzle at the local sports club,” Oh said.
“Social media provides far more effective, interesting, innovative ways to reach out to a new audience so we’re definitely seeing an uptake, especially with our younger, newer broker community.”
Oh said Linkedin and Facebook had been the most popular forms of social media for brokers but many were also now using Instagram, X (formerly Twitter) and even TikTok.
He said Connective has 4,794 members and about half of these members operated under Connective’s credit licence, which meant they had to get all their advertising vetted and approved before it’s publicly released. A growing number of brokers are sending in TikTok videos for review.
Benefits of social media
Using social media meant brokers could reach so many more people than at a physical event, Oh said.
“Being in the cyberverse, where people are liking and clicking on your posts means you can get short, sharp, often very interesting innovative messages across or ways to expose your business and it’s very effective.
“We all scroll through our reels or through our various social media and the algorithms are clearly smart enough and if you’re thinking about a home loan or a mortgage, suddenly brokers start popping up in your feed.”
Risks of social media
Oh highlighted the pitfalls that could occur if brokers mixed their personal and professional views on social media. He provided two examples.
One involved a broker who faced a complaint filed with the MFAA due to a comment made on a mainstream social media platform.
“Engaging in a conversation about political matters, the mortgage broker shared insights from their perspective,” Oh said. “However, the comment, although unintentional, was perceived as offensive and controversial by certain users within the online community.”
The MFAA received an official complaint and a screenshot of the thread, prompting an investigation. The matter was brought to the attention of Connective and required the broker to issue a statement and extend an apology to address the concerns raised.
“This case highlights the need for individuals, especially in professions like mortgage broking, to be cautious when blending personal and professional presence on social media platforms,” Oh said.
He advised brokers to be very careful about what they posted, whether on their personal or professional social media platforms.
“It goes out to the public – you don’t know who’s reading it, who’s digesting it. Keep it professional – you may have strong political or cultural views but just realise not everyone who sees those posts may share those views and some might even be offended by it.”
Oh said the majority of Connective brokers were small business owners, so it was very hard to separate the individual from the business.
“To be super safe, I’d play a straight bat on both your personal and professional social media.”
The other example is when Connective reviews social media posts for brokers.
“We do assist brokers who need their advertising reviewed and we mandate that for our credit representatives,” said Oh. “We see it a lot of examples – brokers want us to check their webpage, YouTube or TikTok videos.”’
He said some of the videos were really clever, but brokers had to be careful about short image-based videos rather than information, text-based ones. All posts need to comply with ASIC Regulatory Guide 234 (RG234).
This guide, which covers advertising requirements for those operating under a credit licence, was written prior to the rise of social media, particularly videos.
“Remember – everything you put out there in public, this is your reputation – how do you want the public to see yourself?” Oh said. “We're talking about mortgages, which is the largest financial decision most Aussies will make.”
Oh said while Connective didn’t want to hamper brokers’ creativity, it was necessary to work within ASIC RG234, a guideline not designed for social media.
“Be careful what you're saying. You can't guarantee to get people the best (interest) rate or ‘this is the most tax-effective solution’ – you can’t say those things.
“They're the great buzzwords, great hooks to try and pull people in but you can't actually say that legally … it’s great to be funny, to be quirky but always keep it professional. Remember – this is your brand, this is your business, this is your reputation.”
Oh encouraged Connective brokers who operated under their own credit licence or the licence of others to reach out to his compliance team for guidance and support before posting on social media.
He acknowledged that there was a growing number of social media influencers, often celebrities without any formal financial expertise, offering financial advice on social media. Oh said brokers often asked why they couldn’t do the same.
“Unfortunately there are people that do that (offer advice) but we can’t control that – all these people are unlicensed – they’re not AFCA members or regulated by ASIC. If someone follows their advice and something goes awry, there’s unfortunately no consequences.”
Oh said if a Connective broker does the same thing, AFCA and ASIC could get involved, and their licence and ability to operate could be removed. “That’s their livelihood gone.”
“All of our brokers are responsible for operating in a compliant manner – it’s your licence or Connective’s licence and ASIC have published reams of guidance on this – you do need to comply with the law.”.
Oh said if AFCA hears a complaint about a broker, which didn’t happen very often, “it’s probably the single most stressful event in a broker’s professional career”.
“It’s an enormous strain on brokers, the fact that they're professionalism and the quality of their assistance is called into question.”
In other recent guidance for brokers released by Connective, Oh underlined the importance of brokers doing all they can to safeguard clients’ privacy, and also staying vigilant to cyber threats.
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