Financial marketing in the cyberage runs through fin-fluencers. Facebook, Instagram and Tik Tok are the most important media. The UK regulators Financial Conduct Authority (FCA) and the Advertising Standards Authority (ASA) have grown increasingly concerned about the misuse of social media by influencers and the harm this can cause their followers. They signed a Memorandum of Understanding to help educate fin-fluencers about the risks of promoting financial products.
Many influencers who promote financial products and thus become fin-fluencers are not aware that they may need regulatory permission to do so. In addition, fin-fluencers are often abused by scammers to trap victims. Fin-fluencers can very quickly run afoul of financial laws.
We’ve seen more cases of influencers touting products that they shouldn’t be. They are often doing this without knowledge of the rules and without understanding of the harm they could cause their followers. We want to work with influencers so they keep on the right side of the law, as this will also help protect people from being shown scams or investments that are too risky.
SARAH PRITCHARD, FCA EXECUTIVE DIRECTOR MARKETS
The regulators will be engaging with influencers and their agents, providing them with clear information about what could be an illegal financial promotion. This includes an infographic, designed for influencers, which will set out what they should check before accepting brand deals for financial products and services. Influencer agents and the Influencer Marketing Trade Body will be invited by the FCA to an open roundtable discussion on illegal financial promotions.