The Financial Conduct Authority (FCA) and Advertising Standards Authority (ASA) has teamed up with Sharon Gaffka to help educate fin-fluencers about the risks involved in promoting financial products.
In addition, the FCA and ASA will be engaging with influencers and their agents, providing them with clear information about what could be an illegal financial promotion. This includes an infographic, designed for influencers, which will set out what they should check before accepting brand deals for financial products and services.
Influencer agents and the Influencer Marketing Trade Body will be invited by the FCA to an open roundtable discussion on illegal financial promotions.
Both the FCA and ASA have grown increasingly concerned about the misuse of social media by influencers and the harm this can cause their followers.
Sarah Pritchard, Executive Director, Markets said: ‘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 understanding of the harm they could cause their followers. … ‘We want to work with influencers so they keep on the right side of the law, as this will also help protect people from being shown scams or investments that are too risky.’
Miles Lockwood, Director of Complaints and Investigations said: ‘We’ve worked hard to ensure that influencers are equipped with the training and advice they need to help them advertise responsibly. From setting up a dedicated webpage to highlight those who are publishing misleading content, to using cutting edge data science to process more ads than ever, we’re seeing influencers increasingly understanding and following the rules.
‘But we recognise that there are still problems, particularly around financial products. That’s why we’re pleased to be partnering with the FCA and Sharon Gaffka to help educate influencers about the risks and responsibilities around marketing these products.’
Sharon Gaffka, social media influencer, said: ‘When you leave a show like Love Island, you are bombarded with opportunities to promote products and work with brands, if like me, you’re new to this kind of work, it can be a little bit overwhelming. … ‘This campaign with the FCA and ASA will hopefully make sure other influencers stay on the right side of the law and prevent them from unknowingly introducing their followers to scams or high-risk investments.’
The campaign follows the recent publication of the FCA’s annual financial promotions report, which revealed that intervention by the regulator led to 8,582 promotions being amended or withdrawn during 2022 – 14 times more than 2021. In 2022 the FCA also published 1882 consumer warnings on its website relating to unauthorised activities.
The FCA will continue to look for opportunities to join up its work with other regulatory partners, recognising that collaboration can lead to better results.
- The FCA and ASA entered into a Memorandum of Understanding, setting out the respective regulatory responsibilities of the FCA and ASA.
- View the infographic.
Financial promotions must be designed relatively transparently to build customer trust and credibility.
Financial companies can tailor their advertisements to meet customer needs by taking a customer-centric approach while complying with regulatory requirements.
Companies must stay current with emerging financial promotion challenges and adopt strategies to mitigate these risks.
By doing so, they can create effective financial promotions that build customer trust and loyalty while driving business growth.
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Remember: Not everything is black and white when it comes to Financial Promotions, and many of the rules are open to interpretation. If you are unsure how your activities fit within the rules, please contact us.
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