The Financial Conduct Authority has warned investment firms on the use of influencers to promote their products on social media, after seeing a sharp uptick in regulatory action on promotions by authorised firms.
In an alert published by the regulator yesterday (February 3) the FCA said the use of social media influencers had become a concern and firms should get legal advice before promoting their products in this way.
This was after it had amended or withdrawn 564 promotions in 2021, an uptick of 172 per cent on the 207 ads the previous year. In both years about 130 authorised firms were involved.
The City watchdog said: “Retail investments’ use of social media influencers on various platforms to market investments is becoming a concern for us.
“Firms should ensure they have taken appropriate legal advice to understand their responsibilities prior to using influencers.”
Retail investments and retail lending were the sectors with the highest number of FCA interventions, amounting to 77 per cent of the total.
This was followed by retail banking (11 per cent), pensions and retirement income (6 per cent), general insurance and protection (4 per cent) and asset management (1 per cent).
The data from the FCA also showed it had issued 1,410 alerts about unauthorised firms and individuals in 2021, an increase of 18 per cent on 2020.
A third (30 per cent) of the warnings issued concerned clone scams.
It also reported a 10 per cent increase in reports received about…
