The FCA Is Cracking Down On Finfluencers Who May Be Offering Products Illegally

The UK financial regulator, the Financial Conduct Authority (FCA) started another crackdown on the so-called “finfluencers” — social media personalities who are offering financial products on popular social networks.

Right now, the regulator is interviewing around 20 influencers under caution who may be promoting products illegally. 

Young British Investors Are Prepared To Trust Finfluencers’ Financial Advice

The regulator has been targeting social media influencers for a while, and it issued around 38 alerts against various social media accounts operated by finfluencers. These are accounts that are suspected of containing unlawful promotions.

The British financial watchdog believes that this is a necessary course of action, as almost two-thirds (62%) of people between the ages of 18 and 29 are following influencers on social media. That includes their views and advice on a variety of matters, including financial products, and when those promotions end up being unlawful, that puts young retail investors at risk.

According to the regulator, around 74% of 18 to 29-year-olds said that they trusted the advice of social media personalities. The regulator estimates that 9 out of 10 young followers have been influenced to change their financial behavior by the finfluencers, which grants them quite a lot of power over their audiences.

Barclays also published new research recently, stating that around 51% of British citizens who use social media for investment guidance are putting both their confidence and their money at risk by not carrying out their own checks. They choose to trust the finfluencers and their content instead of verifying if what they said is reliable and true.

Finfluencers Must Check What They Are Promoting

With investment scams in the UK hitting an all-time high, demand for finfluencer verification has skyrocketed, as investors seek safety and security. However, the fact that they are failing to conduct their own due diligence process shows an even greater necessity to hold influencers reliable when they spread misinformation or make unlawful promotions.

The FCA’s joint executive director of enforcement and market oversight, Steve Smart, said: “Finfluencers are trusted by the people who follow them, often young and potentially vulnerable people attracted to the lifestyle they flaunt.”

Smart added that finfluencers must check the products they promote to ensure that they are not breaking the law by promoting them, and worse, that they are not putting their followers’ livelihoods and lives themselves at risk. 

So far, the FCA’s efforts have led the regulator to take action against nine individuals for promoting unauthorized foreign exchange trading schemes. Trials were already scheduled for early 2027 at Southwark Crown Court.