Facing a surge of finfluencer activity, the FCA moves to enforce advertising rules for social media money advice.
Concerned about the potential for consumer harm, the UK's Financial Conduct Authority has issued a warning to firms and social media influencers promoting financial products online.
The regulatory crackdown, outlined in new guidance published March 26th, is a response to the explosion of financial content and advertisements across platforms like Instagram, TikTok, YouTube and more private channels like Discord. A lot of young adults aged 18-29 now follow at least one "finfluencer" dispensing investing advice and product promotions.
"Promotions aren't just about the likes, they're about the law," stated Lucy Castledine, the FCA's Director of Consumer Investments. "We will take action against those touting financial products illegally."
At the core of the new rules is the requirement that all financial marketing must be fair, clear and not misleading. The FCA stressed even "finfluencers" without formal ties to firms could be committing crimes by improperly promoting regulated investments. Violators potentially face up to two years in prison and unlimited fines.
The guidelines direct firms to implement monitoring systems for any affiliates or influencers they partner with. Certain promotions may also require prominent risk warnings based on product complexity.
This article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of CoinMarketCap, and CoinMarketCap is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. CoinMarketCap is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by CoinMarketCap of the site or any association with its operators. This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice. The views and opinions expressed in this article are the author’s [company’s] own and do not necessarily reflect those of CoinMarketCap. CoinMarketCap is not responsible for the success or authenticity of any project, we aim to act as a neutral informational resource for end-users.
