The Financial Conduct Authority (FCA) has issued new guidance for firms and online “finfluencers” around how they are promoting financial services.

Guidance around memes, reels and gaming streams promoting financial services has been issued after the regulator set out how adverts across social media channels must be “fair, clear and not misleading”.

This means they must have balance and carry the right risk warnings so people can make well informed financial decisions.

Social media has become a central part of firms’ marketing strategies, with firms on the hook for all their promotions, and the FCA has warned they need to ensure influencers they work with communicate to their followers in the right way.

The regulator has also reminded influencers that promoting a financial product without the right approval from an FCA-authorised person could be a criminal offence.

“Any marketing for financial products must be fair, clear and not misleading so consumers can invest, save or borrow with confidence,” said director of consumer investments at the FCA, Lucy Castledine.

“Promotions aren’t just about the likes, they’re about the law. We will take action against those touting financial products illegally.”

The FCA also suggested that financial services firms need to consider whether a social media platform that offers limited characters or space is the right place to promote complex products.

This comes as scrutiny of financial promotions has been ramped up and last year the regulator removed over 10,000 misleading adverts, up from around 8,500 in 2022.

Director of personal finance at AJ Bell, Laura Suter, added: “The FCA is sending out a warning signal to finance companies and influencers that they need to stick within the rules when it comes to social media. But the regulator isn’t introducing any new rules or penalties for those who post misleading content, instead it has just tweaked the guidance to give more examples of when social media posts will be compliant or not.”

Suter continued: “In particular, the FCA has warnings for ‘finfluencers’, who are often dishing out advice on social media even if they don’t have a commercial arrangement with a finance company.

“But there is a darker side to many of these posts, and a significant risk of finfluencers spreading misinformation or encouraging high-risk behaviour, such as day trading in individual stocks, without properly explaining those risks. There’s a real danger that financial social media becomes a Wild West, rather than a space to get accurate, clear information on financial planning.”

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