Social media accounts of regulated people and unregulated influencers are an area of “growing concern” for the Financial Conduct Authority (FCA), which revealed it has sanctioned “several” social media personalities over the past year.
In one case, the FCA found a director of a regulated firm using their personal profile to promote the advice of unauthorised traders and other financial products.
The FCA blocked the director from using their personal social media to promote financial services and imposed a requirement on the firm to halt any financial services promotions.
The details came as the regulator revealed it has required firms to amend or remove 8,582 promotions during 2022 – 14 times more than 2021 – and it has published more than 1,800 alerts to help prevent consumers from losing their money to scams.
But the FCA highlighted that ‘fin-fluencers’ were a “growing” concern and added unauthorised individuals should not advise people on the merits of certain investments, as this will likely be subject to its regulations and could lead to action being taken against them.
The FCA added it has already acted against several social media influencers over the past year.
The risk associated with taking advice from ‘fin-fluencers’ has been raised by the protection industry, with LifeSearch chairman Tom Baigrie last April warning consumers to seek regulated advice rather than listen to prominant personailities when making important financial decisions.
Working with technology companies
The regulator further revealed that social media remains a major focus for the its work in combatting misleading promotions and that it has worked closely with several big tech companies to change their advertising policies to only allow financial promotions that have been approved by FCA-authorised firms.
The FCA added it has made significant improvements to the digital tools it uses to find problem firms and misleading adverts and these improvements have enabled it to work through a much larger number of cases than in 2021.
Sarah Pritchard, executive director, markets at the FCA, (pictured) said: “Our expectations remain the same. Financial promotions must be fair, clear and not misleading.
“What has changed is the FCA’s approach. By drawing on better technology, we’re finding poor quality or misleading ads quicker. And where we find them, we’re stepping in to make firms improve them or remove them entirely.
“This year, we will continue to put the pressure on people using social media to illegally promote investments, which put people’s hard-earned money at risk.
“While households continue to be affected by the rising cost of living, the FCA is concerned that people struggling with their finances may be more susceptible to scammers or adverts showing high risk, unregulated products.
“The FCA is currently consulting on introducing tougher checks for firms which want to approve financial promotions. The measures will make sure the FCA is able to quickly put a stop to harmful financial promotions by unauthorised firms and individuals.”