UK’s FCA and ASA launch campaign to educate financial influencers
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UK regulators, the Financial Conduct Authority (FCA) and the Advertising Standards Authority (ASA), have unveiled a campaign for educating financial influencers. The campaign aims to stop these influencers from using their platforms to promote illegal “get-rich-quick schemes.”
UK regulators launch a campaign to educate financial influencers
For this campaign, the regulators will work with Sharon Gaffka, a popular social media influencer in the UK. The FCA will invite influencer guests and the Influencer Marketing Trade Body to discuss illegal financial marketing.
The Executive Director for Markets at the FCA, Sarah Pritchard, “We’ve seen more cases of influencers touting products that they shouldn’t be. They are often doing this without knowledge of the rules and without an understanding of the harm they could cause their followers.
She added that the FCA wanted to work with influencers to ensure they worked under the provided regulatory framework. Moreover, there was also a need to protect people from engaging in scams and investments that were deemed highly risky.
Gaffka will aid the FCA and the ASA in achieving their objective. She participated in one of the most renowned reality TV shows in the UK and has over 350K followers on Instagram. The regulators have not clarified the role that Gaffka will play in the campaign.
Gaffka noted that the campaign with the FCA and ASA would ensure that influencers remain compliant when promoting products and services. The influencer admitted that most influencers that are new to the space could sometimes be overwhelmed by the opportunities.
Financial regulators crack down on influencer marketing
Platforms offering investment opportunities to retailers have been using financial influencers to promote their products and services. A survey conducted by the Cyprus Securities and Exchange Commission (CySEC) said that 31% of retail investors in Cyprus made investment decisions based on the recommendations given by financial influencers.
The FCA and the ASA have aired concerns over marketing fake financial products. In 2022, the FCA cracked down on such promotions and withdrew or amended 8,582 promotions of financial products. These promotions had increased by 14 times in 2022 compared to 2021.
In Australia, the financial regulator issued warnings to influencers promoting financial products. The regulator took action against Tyson Scholz, an influencer who uses the name ASX Wolf, for violating the financial market laws.
US regulators have imposed multiple fines against influencers in the country promoting financial products. The regulators charged DJ Khalid, Floyd Mayweather, and Kim Kardashian for promoting fake cryptocurrency schemes. The US Securities and Exchange Commission recently charged eight US celebrities for promoting TRX and BTT tokens without disclosing that they were paid to promote the products.
The Director of Complaints and Investigations at the FCA, Miles Lockwood, said that the regulator wanted to ensure that influencers had the right training and advice to ensure they advertised responsibly. Lockwood also said that influencers were becoming more open to understanding and following the rules.
