The UK's Financial Conduct Authority and Advertising Standards Authority have teamed up with Sharon Gaffka to help educate fin-fluencers about the risks involved in promoting financial products, the UK regulator said in a statement on 6 April.
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.
In early reaction, Tom Selby, head of retirement policy at AJ Bell, said: "Savers and investors are increasingly turning to ‘finfluencers' on social media channels like Twitter and Tik Tok to guide their financial decision-making. There has also inevitably been a surge in paid-for promotions of financial products, particularly cryptocurrencies, in recent years.
"Anything that helps engage people, and in particular younger people, with their finances has the potential to be a hugely powerful force for good. If ‘finfluencers' are able to explain to their followers key concepts like compounding and the importance of saving for the future in an engaging way, that could in turn enable people to make better informed financial decisions.
"However, there is also clearly a significant risk of finfluencers spreading misinformation or encouraging high-risk behaviour, such as day trading in individual stocks, without properly explaining those risks. All-too-often, social media looks more like the financial Wild West than a safe space to learn about sensible financial planning.
Selby continued: "It is therefore critical regulators engage with finfluencers to ensure the messages being delivered to savers are not misleading. And where any social media post involves the promotion of a regulated financial product, regulators need to ensure finfluencers are held to the same standard as more traditional advertising.
"One of the big challenges facing UK regulators is that, when it comes to social media, finfluencers are often unregulated individuals pushing unregulated products in a world which is incredibly hard to track and monitor.
"In the worst-case scenario, finfluencers could encourage followers to invest in scam schemes and end up losing everything. The fact a lot of this activity happens outside of the regulated space is likely why the FCA is focusing on educating those pushing out messages to their followers."
