FCA publishes Guidance Clarifying its Expectations for Promoting Financial Services via Social Media

The FCA has published Guidance clarifying its expectations of firms and ‘finfluencers’ promoting financial services across all social media channels, including memes, reels and gaming streams.

The updated guidance does not introduce new obligations but clarifies the FCA’s expectations of those promoting financial services on social media and how firms can comply with existing regulations, as it warns firms and ‘finfluencers’ to keep ads lawful.

Lucy Castledine, FCA Director of Consumer Investments reiterated that “any marketing for financial products must be fair, clear and not misleading so consumers can invest, save or borrow with confidence.”

She continued, “promotions aren’t just about the likes, they’re about the law” and assured that the regulator “will take action against those touting financial products illegally”. Last year, the FCA’s increased scrutiny of financial promotions led to the removal of over 10,000 misleading adverts, up from around 8,500 in 2022.

The FCA updated its existing guidance to address consumer harm arising from new and emerging developments in the ever-evolving social media landscape, including the use of new channels, such as Discord and Threads, and influencer platforms and personas to promote complex financial services and products.

The regulator highlighted the significant risks that consumers face due to the increased use of social media for marketing, which targets larger audiences with greater speed and frequency.

The guidance reiterates that financial promotions should be clear, and provide key information and a balanced view of the benefits and risks to ensure customers can make effective, informed decisions- factors. It also underscores how these expectations align with firms’ wider obligation to deliver good outcomes for customers under the Consumer Duty.

Guidance

The Guidance will be most relevant to:

• Authorised persons involved in communicating or approving financial promotions on social media.
• Unauthorised persons, including influencers or other affiliate marketers involved in communicating financial promotions on social media.
• Trade bodies that represent the above groups

Key notes:

• Financial promotions must be standalone compliant; when considered individually, each communication must comply with FCA rules.
• Some promotions require specific information to be displayed prominently (e.g. risk warning with prescribed wording). Firms should be aware of any additional requirements for how this required information must be displayed.
• Firms must consider whether platforms that limit characters or space is appropriate to use for financial promotions.g. Twitter.
• Firms working with affiliate marketers, such as influencers, must take proactive responsibility for how affiliates communicate financial promotions. This includes having appropriate monitoring and oversight systems to ensure affiliates understand their responsibilities and do not communicate illegal or non‑compliant promotions.
• Unauthorised persons, such as influencers, promoting financial products or services subject to regulation without the approval of an FCA-authorised person may be committing a criminal offence. Even if an influencer does not have a commercial relationship with a firm, their social media communications may be subject to financial promotion restrictions and require approval to communicate.
• Influencers should consider whether they are the right person to promote a product or service and other rules and standards that may apply to their activities. This includes the Advertising Standard Authority’s expectation that if they receive any form of payment, they label content as an advertisement upfront (including affiliate links).

The updated guidance reflects the FCA’s commitment to being an “adaptive” regulator, ensuring that the Consumer Duty continues to be implemented widely and effectively and that its activities and stance are responsive to the dynamism of the sector and continuous advancement of technology and its use.   

Prior to this update, existing guidance was from 2015. Given the speed at which technology, social media and its use are evolving, it will be challenging for the regulator to ensure its guidance and supervisory work remains effective and relevant throughout continuous, rapid, and disruptive developments in the sector.