In Regulatory Wrap for the week to October 25, Jennie Clarke discusses regulatory views on finfluencers and their role in financial promotion.
In this week’s Regulatory Wrap, we explore the Financial Conduct Authority’s (FCA) enforcement efforts concerning social media financial influencers – also known as “finfluencers” – including a recent crackdown on illegal promotion.
1. This week, the FCA is interviewing 20 finfluencers for potentially “touting financial services products illegally” and also issued 38 alerts against social media accounts run by finfluencers that may contain “unlawful promotions”
2. Earlier in the year, the FCA charged nine individuals for posting financial advice on their Instagram accounts even though they were not authorized to do so
3. Similarly, the Financial Industry Regulatory Authority fined M1 Finance $850,000 for paying finfluencers to share social media posts about the firm that were not “fair or balanced” and included misleading claims
4. Considering that 62% of 18 to 29-year-olds follow social media influencers, with 74% saying they trust their advice, it’s clear that social media is an area of concern for compliance teams
5. Per the FCA’s several actions against finfluencers, which suggest the possibility of criminal proceedings, firms should be taking social media’s power seriously
This week’s Regulatory Wrap is brought to you by our Head of Content, Jennifer Clarke.
Finfluencer marketing presents a tremendous opportunity for firms, though preventing potential risks is a factor to consider. By capturing and monitoring communications across social media channels, firms can maintain compliance with retention rules while ensuring fair financial promotion.
