A global coalition of financial regulators, led by the UK’s FCA, has taken coordinated action to clamp down on so-called “finfluencers” promoting unauthorised financial products across social media platforms.
According to Finextra, these online personalities, who often portray lavish lifestyles to boost credibility, are increasingly drawing regulatory scrutiny for misleading content.
As part of a newly launched initiative dubbed the “global week of action against unlawful finfluencers,” regulators from Australia, Canada, Hong Kong, Italy, and the United Arab Emirates joined the FCA in investigating and acting against individuals using their online influence to push financial promotions without proper authorisation.
In the UK alone, the FCA confirmed it had made three arrests, initiated criminal proceedings against another three individuals, invited four others for formal interviews, and issued seven cease and desist letters. Additionally, 50 warning alerts have been published, leading to over 650 takedown requests to social media platforms and more than 50 websites operated by unlicensed finfluencers.
Steve Smart, FCA joint executive director of enforcement and market oversight, warned of the serious consequences for those who flout the rules. “Our message to finfluencers is loud and clear. They must act responsibly and only promote financial products where they are authorised to do so – or face the consequences.”
The FCA defines finfluencers as social media users who promote financial products or advice. While not all are operating unlawfully, regulators are targeting those who do not hold the necessary approvals or who use deceptive marketing tactics. The risks posed to investors, especially younger audiences, have grown significantly with the rise of short-form video content and influencer marketing.
The collaborative effort demonstrates a growing international consensus on the need to police financial promotion on social media. With a rising number of consumers turning to platforms like TikTok, Instagram and YouTube for investment guidance, authorities are stepping up efforts to prevent fraud and misinformation.
The participating regulators included the Australian Securities & Investments Commission (ASIC); several Canadian authorities such as the Alberta Securities Commission (ASC), Autorité des marchés financiers (QAMF), British Columbia Securities Commission (BCSC), and Ontario Securities Commission (OSC); Hong Kong’s Securities and Futures Commission (SFC); Italy’s Commissione Nazionale per le Società e la Borsa (CONSOB); and the UAE’s Securities and Commodities Authority (SCA).
This campaign marks one of the most significant coordinated global enforcement efforts to date aimed at the growing risks in digital financial communications.
Last year, research from Barclays highlighted a critical gap in the due diligence process of UK investors using social media for financial guidance.
The study found that over half (51%) of Brits who consult social media for investment advice fail to regularly verify the credibility of finfluencers and their content. This oversight places their investments at significant risk.
The study, which surveyed over 2,000 UK adults, sheds light on the growing reliance on social media as a source of financial guidance, driven by its accessibility and the cost barriers associated with professional financial advice.
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