As it warns firms and so-called 'finfluencers' to keep their social media ads lawful, the UK's Financial Conduct Authority has published guidance for memes, reels and gaming streams promoting financial services.
With social media becoming an increasingly key part of companies' marketing strategies, the watchdog has reminded financial services firms that they are on the hook for their promotions and need to ensure influencers they work with communicate to their followers in the right way.
Meanwhile, finfluencers are being reminded that promoting a financial product without approval from an FCA-authorised person with the right permission could be a criminal offence.
The FCA removed over 10,000 misleading adverts last year, up from around 8,500 in 2022, as it ramps up scrutiny of financial promotions.
The new guidance sets out how adverts across social media channels must be fair, clear and not misleading, meaning they must have balance and carry the right risk warnings so people can make well informed financial decisions.
Lucy Castledine, director, consumer investments, FCA, says: "Promotions aren’t just about the likes, they’re about the law. We will take action against those touting financial products illegally."
Earlier this month in the US, Finra issued its first social media influencer-related fine, hitting fintech M1 Finance with a $850,000 penalty for posts made on its behalf.
Raza Naeem, financial regulation partner at law firm Linklaters, says of the new FCA guidance: "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."