20 finfluencers are being interviewed under caution by the Financial Conduct Authority (FCA), as it launches targeted action against finfluencers who may be touting financial services products illegally

 
The FCA also issued 38 alerts against social media accounts operated by finfluencers which may contain unlawful promotions.

Increasing numbers of young people are falling victim to scams, and finfluencers can often play a part. Nearly two-thirds (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.
 
Steve Smart, joint Executive Director of Enforcement and Market Oversight at the FCA said:
 
“Finfluencers are trusted by the people who follow them, often young and potentially vulnerable people attracted to the lifestyle they flaunt.

“Finfluencers need to check the products they promote to ensure they are not breaking the law and putting their followers’ livelihoods and life savings at risk.”
 

Nicola Hutchinson, Partner at Reeds Solicitors is currently representing a finfluencer being prosecuted by the FCA and due to stand trial in 2027:

 

“It is clear that the FCA is committed to bringing its prosecutorial weight to bear in the social media space.  The section 23 Financial Services & Markets Act 2000 offence, which the FCA has already used to charge other influencers, appears (at first blush) to fit the conduct that it wishes to target, the suggestion being that the promotion of financial products on social media channels amounts to “carrying out a regulated activity without authorisation”.  However, the offence is highly technical in nature and it is legitimate to ask whether the section was intended to, and does, criminalise the targeted conduct.  That in turn raises the question whether criminal prosecution is the appropriate enforcement response, as opposed to civil law interventions.  It might be argued that the FCA’s real intention is to send a loud messages to influencers that it is “watching” what they are doing, and that if that message is heard these prosecutions have already achieved their objective, whether or not any convictions follow.  Only time will tell if the FCA is right or its plan back fires”

 

FCA ‘finfluencer’ crackdown – personal finance/pension expert weighs in

 
Lily Megson, Policy Expert at My Pension Expert, said: “It’s no secret that personal finance content on social media has exploded in popularity, with millions turning to platforms like TikTok, Instagram and Facebook for guidance, with mixed results. At its best, this content can serve as an engaging and accessible way to get an informative overview of certain fiscal concepts. But at worst, it can be ill-suited to the financial situations of those consuming it – or even just wildly inaccurate – leading people to poor financial decision-making.

“In a bid to drive following and engagement, many online creators treat their tips as gospel. But this ignores the simple fact that successfully tackling your personal finance planning is far from one-size-fits-all. People’s financial circumstances vary so hugely that guidance given on video viewed by hundreds of thousands just cannot reliably meet the needs of all watching.

“Take pension planning, for example. The financial priorities and therefore the retirement savings approach of a 55-year-old mortgage-free homeowner differ significantly from that of a 30-year-old new parent struggling with debt.

“So where can savers go from here? Firstly, if it helps you stay engaged with and on top of your personal finances and planning, then continue consuming it. Just take it with a considerable pinch of salt. And importantly, don’t act on it unless it comes from a 100% reliable resource, such as a government organisation.

“For a solution tailored specifically to your goals, consider independent financial advice. An advisor would take into account your unique financial situation, goals, and risk tolerance, and help you put together a plan for both shorter term financial goals (holidays, new cars, paying off a pay day loan) and longer ones (buying a home, saving for children, retirement planning).” 

 

Background

 

  • Finfluencers are social media personalities who uses their platform to promote financial products and share insights and advice with their followers; there has been a significant increase in finfluencers over recent years. These people are not FCA authorised and are unqualified to be giving financial advice to the younger and often very impressionable age groups who follow them.
  • The FCA is unable to name those targeted for interview.
  • The individuals were interviewed voluntarily under caution using the FCA’s criminal powers.
  • Consumers should check the FCA’s warning list before making any decision about how to invest their money. The FCA’s InvestSmart page contains useful information to help people make better investment decisions.


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