Perks such as airline miles, cash vouchers and fee-free trades are helping lure record number of Aussies onto the share market, many via apps and online brokers.
But their money could be down the drain within hours if they gamble it on hazardous products they don't understand, according to the Australian Securities and Investments Commission.
Along with ordinary shares, products such as futures, derivatives and fractional shares are available at the touch of a button, but their complexity and heightened hazards are often poorly explained, the commission said.
"I've spent my most of my career in and around derivatives and financial markets and I think it's complex," ASIC commissioner Simone Constant told AAP.
"We welcome the fact that Australia is a nation of investors ... (but) Australians should only be offered products and brought on board to invest in products that are right for them."
Novices easily scaling barriers to high-risk products, mismatches between investors and what they were buying and scant information about financial dangers were found among nine online brokers ASIC scrutinised between March and June.
One of the brokers had deserted Australia altogether since the watchdog tapped them on the shoulder, two have stopped taking on customers for some higher-risk products and five have cleaned up their act, the watchdog said on Thursday.
"That shows you both the benefit and the deterrence and compliance impact we have through doing this sort of targeted surveillance," Ms Constant said.
"And also, frankly, that we were right to be concerned and need to do the surveillance."
Options and derivatives in particular can pose huge risks to the uninitiated, in some cases costing investors more than they put in, even though the potential gains are enormous.
Being cheap or easy to access did not make a product a safer bet, Ms Constant said.
"Another example is fractional shares," she said.
"It's a way to get into what might be a big ticket share, but actually ... your ability to move that, to trade that, to sell that, to move to another platform, they're not the same as for a regular share."
The commission highlighted a $300 million fine slapped on now-collapsed broker Union Standard International in June for inappropriately letting investors loose on derivatives riddled with financial peril, among other things.
The fine was the maximum under law and the largest the watchdog has secured.
But Australia's safety net was well-strung to protect investors while keeping the market's doors open, financial technology peak body FinTech Australia told AAP.
"Australia has a strong regulatory framework governing how financial products are offered," FinTech chief executive Rehan D'Almeida said in a statement.
"The framework should give consumers the information and safeguards they need, while recognising their ability to make choices based on their own circumstances and risk appetite."
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