The Financial Conduct Authority (FCA) is intensifying its efforts to curb illegal activities by financial influencers, commonly known as “finfluencers“, who may be promoting financial services unlawfully.
As part of a targeted crackdown, the regulator has issued 38 alerts against social media accounts run by finfluencers suspected of engaging in illegal promotions.
In addition, 20 finfluencers are being interviewed under caution using the FCA’s criminal powers as part of the investigation.
The rise in finfluencers, who use social media platforms to offer financial advice or promote financial products, has sparked concerns among regulators.
Many of these influencers lack proper qualifications or FCA authorization, yet they hold sway over a large and often impressionable audience, particularly young people.
According to recent figures, nearly two-thirds (62%) of 18- to 29-year-olds follow social media influencers, and 74% of them trust the advice given.
Alarmingly, 90% of young followers report that influencers have influenced their financial decisions.
Steve Smart, joint executive director of enforcement and market oversight at the FCA, expressed concerns over the trust young people place in finfluencers.
He emphasized that while these influencers often flaunt an appealing lifestyle, they may be promoting products that violate the law and expose followers to significant financial risks.
Smart urged finfluencers to ensure the legality of the financial products they promote, warning that they risk jeopardizing their followers’ financial well-being and life savings.
The FCA’s actions are part of a broader push to protect consumers, particularly younger and vulnerable individuals, from falling victim to scams and illegal schemes promoted on social media.
The regulator has already taken enforcement action against nine finfluencers who were found to be promoting an unauthorized trading scheme.
The FCA has advised consumers to verify the legitimacy of financial services by consulting the FCA’s warning list before making any investment decisions.
The regulator also directs consumers to its InvestSmart page, which offers resources and guidance to help individuals make more informed financial choices.
The names of the finfluencers under investigation have not been disclosed, and the interviews are being conducted on a voluntary basis.
The FCA continues to monitor the activities of finfluencers closely as part of its broader mission to safeguard the financial interests of the public.
