The reel cost: UK FCA cracks down on ‘finfluencers’

Background

Finfluencers are social media figures who leverage their platforms to promote financial products, as well as to provide insights and advice to their audience. Whilst many operate legitimately, others engage in illegal or otherwise unlawful promotions of financial products or services without proper authorisation, using online videos and posts that often falsely portray a luxurious lifestyle to suggest success.

The regulator’s concern is that finfluencers may be promoting financial products which are unsuitable for their audience, or doing so in a way that is misleading or even fraudulent. The FCA’s targeted action against finfluencers aligns strongly with its latest five-year strategy to help consumers, fight crime and be a smarter regulator. 

UK financial promotions regime

The UK’s Financial Services and Markets Act 2000 (FSMA) regulates how a person can communicate a financial promotion, which is an invitation or inducement to engage in investment (or claims management) activity. Any form of communication is capable of being a financial promotion although the communication must be made “in the course business”. This financial promotion regime covers a wide variety of financial products and services, such as deposits, consumer loans, investments, insurance, pensions, mortgages, and certain “qualifying cryptoassets”.

Section 21 FSMA states that it is unlawful for a person, in the course of business, to communicate (or cause to communicate) such an invitation or inducement in the UK unless:

• the communicator (or the person causing the communication) is an FCA authorised person; 
• the content of the financial promotion has been approved by a person who is authorised by the FCA to approve financial promotions; or 
• an exclusion in the FSMA (Financial Promotion) Order 2005 applies.

This is referred to generally as the “financial promotion restriction”. 

Further guidance on the FCA's interpretation of the financial promotion regime is set out in Chapter 8 of the FCA's Perimeter Guidance Manual. The FCA has also published product-specific guidance on financial promotions in the FCA Handbook, e.g. COBS for investment and long-term insurance products, and MCOB for home finance products such as mortgages.  

The financial promotion restriction also has broad territorial application. It applies to communications by UK-based firms as well as communications originating outside the UK if they are “capable of having an effect in the UK”.

It is a criminal offence not to comply with the financial promotion restriction. The maximum penalty is two years imprisonment, a fine, or both (section 25 FSMA). It is a defence for the individual to show that they reasonably believed that the content of the communication was prepared or approved by an authorised person; or that they took all reasonable steps and exercised all due diligence to avoid committing the offence.  

An international effort

In June 2025, nine international regulators took part in a week of targeted action. In the UK, the FCA made three arrests, authorised criminal proceedings against three individuals, invited four finfluencers for interview, sent seven cease and desist letters; and issued 50 warning alerts. The FCA also confirmed that its warning alerts will result in over 650 take down requests on social media platforms and more than 50 on websites operated by unauthorised finfluencers.

In May 2025, the International Organization of Securities Commissions, of which the FCA is a member, published a report examining finfluencers and proposing good practice for regulators. Such proposals included: 

• clearly defining the scope of finfluencer activities that fall within their jurisdictions and adapting existing frameworks to cover these activities where gaps may exist; 
• requiring market intermediaries to take all appropriate steps to identify and address conflicts of interest; and
• requiring the use of standardised disclaimers and clear, concise disclosures by finfluencers to help investors understand the nature of the content they are consuming.

This coordinated international effort reflects a broader intention to tackle sources of online harm. In the UK, the FCA has been focusing its enforcement resources on cases that will have a strong deterrent effect. Taking action against finfluencers may be an effective way to raise awareness of the financial promotions regime and the consequences of non-compliance. 

A cautionary reminder

Although these charges have been brought against individuals, this enforcement action should serve as a cautionary reminder for individuals and firms to ensure they operate in line with the UK financial promotion regime, having regard to FCA rules and guidance.

Firms working with affiliate marketers, such as influencers, must take proactive responsibility for their communication of financial promotions. The FCA Finalised Guidance on Financial Promotions on Social Media (FG24/1) suggests that this should include having appropriate monitoring and oversight systems to ensure that affiliate marketers understand their responsibilities and do not communicate unlawful or otherwise non-compliant financial promotions. Firms remain responsible for the compliance of every promotion they make or “cause to be made”, irrespective of whether certain practical responsibilities are delegated to the affiliate marketer. 

In addition, firms should be mindful that the UK financial promotion regime also contains specific restrictions around high-risk investments such as contracts for difference and certain “qualifying cryptoassets”, which generally seek to limit the marketing of such products to retail customers. Firms using social media to promote cryptoassets or investment products should ensure they are familiar with all relevant marketing restrictions before promoting any such products.

This article was first published in the July 2025 edition of PLC Magazine.