Finfluencers Under Fire: Global Clean-Up of Rogue Financial Promotions

Author: Priscilla Gaudoin - Head of Risk & Compliance - published June 2025

Topics: Financial Promotions, Scams, Third Parties, Due Diligence

Regions and Regulators: UK, FCA

"Increasing numbers of young people are falling victim to scams, and finfluencers can often play a part" (FCA, Oct 2024) 

In recent years, we have seen the FCA highlight the risk posed by finfluencers, which is illustrated by the regulatory action taken against this group of individuals.  In October 2024, the FCA interviewed 20 influencers and issued 38 alerts against social media influencers.  These individuals were encouraged to change their ways.  How has the regulatory stance changed?  The FCA has intensified its efforts to regulate the burgeoning sector of financial influencers, known as ‘finfluencers’. In a significant move, the FCA has conducted interviews with 20 social media influencers under caution, focusing on those promoting high-risk financial products such as Contracts for Difference (CFDs) and foreign exchange trading. These influencers often present themselves as successful traders, showcasing luxurious lifestyles to attract followers. The FCA’s intervention aims to ensure that such promotions comply with the UK financial regulations.

International Collaboration and its Importance:

The rise of digital platforms has made financial promotions borderless, with influencers reaching audiences across the globe. This international reach necessitates a collaborative approach among regulators. The FCA collaborated with regulators from Australia, Canada, Hong Kong, Italy and the United Arab Emirates to address the global issue of unauthorised financial promotions. The FCA’s partnership with foreign counterparts allows for the sharing of information, joint investigations, and coordinated enforcement actions.

Such collaboration is crucial in tackling the challenges posed by finfluencers. For instance, influencers operating from one jurisdiction can easily target consumers in another, making it difficult for individual regulators to take effective action. By working together, regulators can ensure that financial promotions are fair, clear, and not misleading, regardless of where the influencer is based.

Concerns Raised by the FCA

Figure 1: Regulatory concerns

The FCA has emphasised several concerns regarding the activities of finfluencers as follows:

1. Lack of Authorisation:

Many influencers promote financial products without the necessary regulatory permissions which can mislead consumers into making uninformed investments decisions.

2. Misleading Content:

Some influencers exaggerate potential returns or downplay risks associated with financial products, creating unrealistic expectations among their followers.

3. Targeting Vulnerable Audiences:

Young and inexperienced investors are particularly susceptible to the allure of quick financial giants, making them prime targets for misleading promotions.

4. Evasion Tactics:

Influencers often circumvent regulatory scrutiny by frequently changing their online identifiers or platforms, making it challenging for regulators to track and take action against them.

These concerns have prompted the FCA to take a more proactive stance, issuing warnings, conducting interviews, and collaborating with other regulators to address the issue comprehensively.

Firms’ Considerations:

Regulated firms that engage with influencers to promote their products must ensure compliance with regulatory standards. The FCA’s guidance emphasises that firms are responsible for the content of financial promotions, even if created by third-party influencers.

Figure 2: Key actions for firms

To mitigate risks, firms should:

• Conduct due diligence

Vet influencers thoroughly to ensure they have the necessary qualifications and authorisation to promote financial products.

• Provide clear guidance

Establish clear parameters for influencers regarding the content and messaging for promotions or ensure they align with regulatory requirements.

• Monitor content

Regularly review the content produced by influencers to ensure ongoing compliance with financial promotion rules.

• Educate influencers

Provide training to influencers about the legal and ethical standards expected in financial promotions.

• Implement Contracts

Use formal agreements to outline the responsibilities and expectations of both parties, reducing the risk of non-compliance.

By taking these steps, firms can protect themselves from potential legal repercussions and uphold the integrity of financial promotions.

The Way Forward:

The FCA’s crackdown on finfluencers marks a significant step in regulating the evolving landscape of financial promotions. However, the digital nature of these promotions presents ongoing challenges. Continuous collaboration among international regulators, coupled with proactive measures by financial firms, is essential to ensure that consumers are protected from misleading financial advice.

As the digital world continues to shape the financial sector, regulators and firms must remain vigilant and adaptable.   The lessons learned from the FCA’s recent actions can serve as a blueprint for other jurisdictions grappling with similar issues, fostering a global approach to responsible financial promotions.

Recent Developments:

The FCA has led an international effort to remove unauthorised financial promotions, resulting in numerous takedown requests and arrests.  The FCA has faced challenges in ensuring that social media platforms promptly remove harmful content, highlighting the need for better cooperation between regulators and tech companies.

Several finfluencers have been charged with promoting unauthorised financial schemes, signaling a more aggressive stance by regulators.  These developments underscore the importance of compliance and vigilance in the realm of financial promotions, especially in the digital age.

The FCA’s recent action reflects a growing recognition of the need to regulate financial promotions in the digital era. Through international collaboration and stringent enforcement, regulators aim to protect consumers from misleading financial advice. Financial firms must adapt to this evolving landscape by ensuring compliance and fostering responsible marketing practices. Only through collective efforts can the integrity of financial promotions be maintained in an increasingly interconnected world.

How Ruleguard Helps The Financial Sector:

Ruleguard is an industry-leading software platform designed to help regulated firms manage the burden of evidencing and monitoring compliance. It has a range of tools to help firms fulfil their obligations across the UK, Europe, N America, and APAC regions.

The Ruleguard's Financial Promotions Solution allows firms to:

• manage and oversee the approval of financial promotions in a robust manner with a full audit trail
• provide an overview of all approved financial promotions, including how they are distributed
• allow firms to store and access supporting evidence to verify any claims made in the promotion.

Additionally, Ruleguard's Supplier Oversight Solution enables firms to automate their due diligence and oversight relating to third parties.

If you’d like to learn more about the Ruleguard's Financial Promotions Solution, please contact us for further information on: Tel: 0800 408 3845 or hello@ruleguard.com.

Related Webinars, White Papers and Blogs

Ruleguard hosts regular events on various regulatory topics. You can watch our webinars on-demand at your convenience, or read our blogs, white papers, infographics, and tune in to our podcasts.

Blogs & Webinar:

• Signing off financial promotions with finesse
• Cryptoassets: Why be concerned?
• Financial Promotions: Gateway to Success

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Book a discovery call today and discover how Ruleguard can help your firm easily manage intricate FCA regulations with Ruleguard!

 

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About the author

In a career spanning 30 years, Priscilla has worked as a consultant, CCO and MLRO providing regulatory oversight and advice to firms across the financial services industry. She is responsible for our thought leadership programme, writing regular articles and white papers, and hosting webinars on a variety of regulatory matters.

She is a Fellow of the International Compliance Association, a certified GRC practitioner, and a member of the Institute of Risk Management.

 

Contact Priscilla