The UK Financial Conduct Authority (FCA) issued a Directive for memes, reels and game streams promoting financial services.
The FCA has set out how advertising on social media channels must be fair, clear and not misleading, meaning they must be balanced and carry the right risk warnings so people can make well-informed financial decisions.
Social media has become a central part of companies’ marketing strategies. Companies are front and center for all their promotions and the FCA has warned that they need to ensure that the influencers they work with communicate with their followers in the right way.
And influencers are reminded that promoting a financial product without approval from an FCA-authorized person with the correct license could be a criminal offence. Consumers need to be alert to dubious ads and scams online, but it’s important for influencers to make sure they’re on the right side of the rules and consider what will happen to their own reputation if they’re found to be promoting products illegally.
Lucy Castledine, Director of Consumer Investments at the FCA, said:
“Any marketing for financial products must be fair, clear and not misleading so that consumers can invest, save or borrow with confidence.
“Promotions aren’t just about likes, they’re about the law. We will take action against those who advertise illegal financial products.”
Social media will not always be the best place to promote complex products. Companies should consider whether a platform that offers limited characters or space is the right place to do it. Scrutiny of financial promotions has been stepped up and last year the FCA removed more than 10,000 misleading ads, down from around 8,500 in 2022.