Context
The FCA has announced that it is interviewing 20 ‘finfluencers’ under caution, targeting those who may be touting financial services products illegally. The FCA has also issued 38 alerts against social media accounts operated by finfluencers which may contain unlawful promotions.
Key points to note and next actions
According to the FCA, increasing numbers of young people are falling victim to scams, and finfluencers can often play a part. 62% of 18- to 29-year-olds follow social media influencers, 74% of those said they trusted their advice and 9 in 10 young followers have been encouraged to change their financial behaviour.
Back in March 2024 the FCA issued Finalised Guidance (FG24/1) in which it stated: “There are financial influencers known as ‘finfluencers’ who may not be authorised by the FCA to provide financial advice yet share their opinions and recommendations on digital platforms. Consumers show high levels of trust in finfluencers, but their advice can sometimes be misleading.” And: “Influencers should consider whether they are the right person to promote a product or service.”
This is an area of increasing and ongoing activity for the FCA, pursuing those who would seek to make money out of the unsuspecting (and potentially vulnerable) public by selling them inappropriate financial products (including insurance – and I understand that ‘finfluencers’ have been used by some in the general insurance space). Firms using finfluencers, bearing in mind that a number are currently being ‘interviewed under caution’, should perhaps tread carefully.