Influencers are in the news again – this time in the context of financial services. The FCA recently published its annual financial promotions report, which revealed that intervention by the FCA led to 8,582 promotions being amended or withdrawn during 2022. This was 14 times more than 2021. In 2022 the FCA also published 1882 consumer warnings on its website relating to unauthorised activities.
Following the report, both the FCA and ASA have grown increasingly concerned about the misuse of social media by influencers and the harm this can cause their followers.
In an example of regulators working together, the FCA and ASA have teamed up with Sharon Gaffka (previously on Love Island) to help educate influencers about the risks involved in promoting financial products.
In addition, the FCA and ASA 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 (see image), designed for influencers, which will set out what they should check before accepting brand deals for financial products and services.
The infographic covers the following key points which influencers should bear in mind:
- Are you providing advice about a financial product?
- Are you arranging for your followers to deal in a financial product?
- Are you authorised by the FCA or has your post been approved by a person approved by the FCA?
- Have you or your agent done your due diligence?
- Does your post follow the ASA rules?
- Are you promoting crypto? If so you must make it clear to your followers that cryptocurrency is unregulated; that profits may be subject to tax; and that the value of any investment may fall.
- Do not suggest to your followers that cryptoassets would be an easy investment decision or create any sense of urgency or “fear of missing out”.
The FCA says that it will be inviting influencer agents and the Influencer Marketing Trade Body to an open roundtable discussion on illegal financial promotions.
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