On March 26th 2024 the FCA published its finalised guidance (FG24/1) regarding financial promotions on social media.
This new guidance follows a consultation in July 2023 and replaces its previous guidance (FG15/4). The purpose of the new guidance is to clarify the regulator's expectations regarding financial promotions and how they should be promoted on newer forms of social media. It also aims to address increasing consumer harm, particularly due to the complex nature of many financial products and services promoted on these platforms.
The FCA states that financial promotions on all advertising channels should be fair and provide a balanced view of the risks and benefits of the promoted product or service. Customers should therefore have a clear understanding of such promotions and be armed with sufficient information to be able to make both informed and effective decisions.
The regulator warns that for complex financial products social media will not always be the best platform for promotion, especially where a platform offers limited characters or space.
The guidance sets out the regulatory expectations for firms and individuals, including influencers, regarding compliance with the UK’s financial promotions regime. Furthermore it details how recent rule changes, like the Consumer Duty, now apply to promotions on social media.
Influencers and other affiliate marketer can also find information to help them understand when a communication on social media is likely to be subject to the financial promotion restriction.
Those affected by the new guidance include:
Authorised persons who are involved in communicating or approving financial promotions on social media.
Unauthorised persons, including influencers involved in communicating financial promotions on social media.
Trade bodies that represent the above groups.
It is important to note that any unauthorised persons, such as social media influencers, who promote a regulated financial product or service without approval of an appropriate FCA-authorised person may be committing a criminal offence.