FCA cracks down on ‘finfluencers’

The increasing number of online ‘finfluencers’ has pushed regulators to take legal action in an unprecedented crackdown on online personalities handing out financial advice.

According to statistics from the Financial Conduct Authority (FCA), action being taken against finfluencers has increased by 174% last year.  

Importantly, this has led to three finfluencers being arrested and charged with encouraging followers to invest in high-risk foreign exchange traded funds. Their court appearances are set for 2027.

This is important as it demonstrates the shifting landscape around unregulated financial advice. For many years the finfluencer trend has been growing, with many content creators, such as those found on TikTok or Instagram, pivoting to give their often young audience questionable financial advice, sometimes in the form of ‘get rich quick’ schemes.  

Given the sheer scale of unregulated financial advice being promoted on these social platforms, there are calls for broader social media reform and platform cooperation. 34 million videos are uploaded to TikTok every day, and the FCA cannot check every one.  

However, the first arrests demonstrate that the FCA is serious about cracking down on the trend, and sets a precedent that things are changing.

The FCA commented: “Even when social media platforms remove the illegal content we flag, new accounts pop up in no time with identical, or almost identical, content. They must be more proactive in identifying and removing unlawful content early before it reaches UK consumers.”

Despite this, it is important to recognise that there is another side, and the FCA does acknowledge that some finfluencers can offer helpful guidance, which makes policing the content all the more difficult.

What is a ‘finfluencer’?

Finfluencer is a relatively new term, used to describe a content creator who operates on social media to promote financial products and services to their audience. What separates a finfluencer’s advice from real financial advice is the finfluencer is often unqualified, unauthorised and unregulated. Finfluencer derives from the term ‘influencer’ which, in marketing and social media terms, refers to a person with the ability to influence viewer’s opinions on social media or video sharing platforms like YouTube. You do not need to prove that you have any qualifications to become a finfluencer, you just need to have an audience.

The problem with finfluencers

If a finfluencer is knowledgeable about the product or service they promote and their content is considered 'responsible' by the FCA, finfluencers can actually be beneficial. They help to educate buyers and help them to evaluate their choices and understand the variety of products available to them in a simple and easy to digest way.

The problem is that there are many examples where this is not the case. Many finfluencers promote unlawful 'get rich quick' schemes or act irresponsibly in their communications, with endorsement of questionable crypto investments and ‘memestocks’ being a common trend (at the time of writing). In such cases, less knowledgeable audience members could be exploited and even scammed, with 55% of those who have followed financial advice on social media reporting losing money, according to TSB.

Aside from the obvious detriment to the victims of this kind of unlicensed advice, the wider reaching implication is that this misinformation leads to a general distrust of financial services, further discouraging financial literary and ultimately hurting the average consumer.

 If you are tired of misinformation and are seeking real, impartial and fully qualified financial advice, book a free non-committal initial consultation with one of our accredited advisers who will be happy to help. Alternatively, you can give us a call on 0333 323 9065.  

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This article is for information only and does not constitute individual advice. 

The Financial Conduct Authority (FCA) does not regulate cash or tax advice.

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