The Financial Conduct Authority (FCA) has issued guidance on how financial promotions should be communicated on social media.
Financial promotions on all advertising channels must be fair, clear and not misleading and support consumer understanding.
The FCA’s financial promotion rules are technology neutral and apply to all channels used to advertise, including social media.
“We want companies to ensure that promotions provide a balanced view of the benefits and risks, and that they clearly communicate information that will help consumers make effective, informed decisions,” the authority said in a statement.
It added: ‘Unauthorized persons, such as social media influencers, who promote a regulated financial product or service without the consent of an appropriate FCA authorized person may commit a criminal offence. We are also including perimeter guidelines to provide additional clarity on when a communication could constitute a financial promotion.”
The guidelines are relevant to authorized persons involved in communicating or approving financial promotions on social media.
Unauthorized individuals, including influencers or other affiliate marketers, involved in communicating financial promotions on social media.
Also professional organizations representing the two groups mentioned above.
The FCA recognizes that social media is an increasingly important part of companies’ marketing strategies and has enabled them to reach large audiences faster and more frequently than ever before. However, she is concerned that poor quality financial promotions on social media could lead to significant consumer harm due to their wide reach and the complex nature of many financial products and services.