Over recent years, there has been a growing trend of celebrities and media personalities using their influence to promote financial services and products. To tackle this growing risk to consumers, the Financial Conduct Authority (“FCA”) and the Advertising Standards Agency (“ASA”) have teamed up with social media personality, Sharon Gaffka, to help educate Influencers about the risks involved in promoting financial products. The regulators have published an infographic, which sets out what Influencers should do before accepting brand deals for financial products and services.
With the penalty for making an unlawful financial promotion being a maximum penalty of up to 2 years in prison and an unlimited fine, the FCA and ASA have asked that Influencers;
- Check whether the financial products or service is or should be authorised by the FCA
- Conduct due diligence
- Follow ASA rules
- Don’t mislead followers and subscribers by using language which suggest an easy investment decision or create a sense of urgency.
The FCA and ASA are seeking to engage with what has been dubbed as ‘fin-fluencers’, talent agents and management who may use their platform to promote financial services and products to their subscribers. The FCA also intend to invite the Influencer Marketing Trade Body to an open roundtable discussion on illegal financial promotions.
Sarah Pritchard, Executive Director of Markets at the FCA said:
‘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.’
This campaign follows the recent publication of the FCA’s annual financial promotions report, which revealed that intervention by the regulator led to 8,582 promotions being amended or withdrawn during 2022. This latest campaign demonstrates the FCA’s commitment to partnering with other regulators to strengthen their regulatory reach.
