FCA Warns Firms and Influencers to Advertise Legally on Social Media

According to guidance published on March 26, 2024, the Financial Conduct Authority (FCA) has set 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.

The FCA says firms are on the hook for all their promotions on social media. And the regulator has warned they need to ensure influencers they work with communicate to their followers in the right way.

Influencers are reminded that promoting a financial product without approval from an FCA-authorised person with the right permission could be a criminal offense. Consumers need to be alert to dubious adverts and scams online, but it is important that influencers ensure they’re on the right side of the rules and consider what would happen to their own reputations if they’re found to promote products illegally.

Lucy Castledine, Director of Consumer Investments at the FCA, said, “Any marketing for financial products must be fair, clear and not misleading so consumers can invest, save, or borrow with confidence. Promotions aren’t just about the likes, they’re about the law. We will take action against those touting financial products illegally.”

Social media will not always be the best place to promote complex products. Firms need to consider whether a platform that offers limited characters or space is the right place to do so, the FCA noted.

The FCA has ramped up scrutiny of financial promotions and removed over 10,000 misleading adverts last year, up from around 8,500 in 2022.