Memes, reels, streams and more that promote financial services and products must comply with rules requiring that industry advertising doesn’t mislead investors, says new guidance issued by the U.K.’s Financial Conduct Authority (FCA).
The guidance sets out how social media-based marketing can comply with the FCA’s rules on advertising, which require promotions to be fair, clear and not misleading, and to carry required risk warnings.
“Poor quality financial promotions on social media can lead to significant consumer harm due to their wide reach and the complex nature of many financial products and services,” the FCA said in its guidance. “Firms are 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.”
Financial firms must consider whether complex products can be promoted on certain social media platforms in compliance with the advertising rules, given their space restrictions, it noted.
Additionally, the regulator warned influencers that touting a financial product without approval from regulated personnel could be a criminal offence.
“Consumers need to be alert to dubious adverts and scams online, but it is important that influencers ensure they’re on the right side of the rules and consider what would happen to their own reputations if they’re found to promote products illegally,” the FCA said.
“Promotions aren’t just about the likes, they’re about the law. We will take action against those touting financial products illegally,” said Lucy Castledine, director of consumer investments at the FCA, in a release.
The FCA said it removed more than 10,000 misleading advertisements in 2023.