The UK’s Financial Conduct Authority (FCA) has issued guidance for social media ads featuring financial services, cautioning both firms and ‘finfluencers’ to ensure their promotions comply with legal standards.
As companies increasingly leverage social media for marketing, the FCA emphasized that financial services providers are responsible for their advertisements and must ensure that influencers convey accurate and appropriate messages to their audiences. Finfluencers have also been alerted that promoting financial products without the endorsement of an FCA-authorized individual could result in criminal charges.
In a notable increase in vigilance, the FCA removed over 10,000 misleading ads last year, compared to about 8,500 in 2022, signaling a heightened scrutiny of financial promotions.
The newly published guidance details that social media ads must be fair, clear, and not misleading. This includes presenting balanced information and including appropriate risk warnings, ensuring consumers can make fully informed financial decisions.
Lucy Castledine, the FCA’s director of consumer investments, remarked, “Promotions aren’t just about the likes, they’re about the law. We will take action against those touting financial products illegally.”
Recently, in the United States, Finra imposed its first fine related to social media influencers, penalizing fintech firm M1 Finance $850,000 for misleading posts made on its behalf.
Raza Naeem, a partner specializing in financial regulation at law firm Linklaters, commented on the FCA’s new guidelines, stating, “Firms will need clear restrictions and/or processes in place to avoid falling foul of the rules, and to also train relevant employees and any finfluencers they collaborate with.”