Financial promotions on social media – guidance from the FCA

Social media has become an integral platform for financial promotions. However, with this increased accessibility comes greater regulatory scrutiny. The Financial Conduct Authority (FCA) has recently announced its final guidance on financial promotions within social media, replacing outdated guidelines from 2015. These changes reflect significant shifts in the social media landscape and the implementation of Consumer Duty.

The new guidance is particularly welcomed as it addresses the proliferation of “finfluencers” on TikTok, Facebook, and Instagram platforms. Many of these influencers lack the qualifications or authorisation required to provide financial advice, potentially exposing consumers to harm. The FCA stresses that providing financial advice without proper authorisation may constitute a criminal offence.

One of the key concerns highlighted by the FCA is the potential for substandard financial promotions to reach a wide audience on social media platforms. To mitigate this risk, financial promotions must adhere to the principle of being “fair, clear, and not misleading.” Moreover, companies must present a balanced view of the benefits and risks associated with their products to enable consumers to make informed financial decisions.

Compliance with regulatory requirements is vital for firms engaging in financial promotions on social media. Each communication must comply with the FCA’s rules, even when considered individually. The FCA guides on assessing the compliance of new forms of communication, such as Instagram stories, to ensure they meet regulatory requirements.

With FCA rules and guidance spread across multiple source books including PRIN, ICOBS, COBS, GEN, PERG and SUP, firms are faced with significant obligations and risks they need to consider regarding financial promotions – whether via social or other online or offline channels and as a result, firms often require expert help to reduce their regulatory risk.

The FCA also takes the opportunity to remind firms of their responsibility for the financial promotions distributed by their affiliates. Establishing effective monitoring and oversight mechanisms is essential to ensure affiliates understand their obligations and refrain from sharing unlawful or non-compliant financial promotions. Many firms rely on exemptions to promote via unregulated affiliates, and this area has historically caused firms issues with the 2015 guidance referring to a leaflet for pet insurance on display in a veterinary practice, and GreenKite welcomes a long over-due update to this guidance.

In the  final guidance, FG24/1, the FCA  offers practical guidelines to assist firms in designing compliant financial promotions, and considerations, including:

• Clearly indicating that the material is marketing content
• Including the firm’s registered name in the promotion
• Presenting information in a legible, accessible, and balanced manner
• Avoiding pricing claims that may be misleading or deceptive
• Disclosing the name of the insurer and obtaining their approval if mentioned in the promotion
• Ensuring compliance with relevant legislation, including consumer protection and business protection regulations, advertising standards authority guidelines, GDPR, Data Protection Act 2018, and PECR

However, in such a complex and high-risk environment, with rules and guidance spread across multiple areas, it may be time to bring in expert help to assist you in your training or assurance activity so you can be confident you are doing things right.

GreenKite is here to help. In this area, we offer extensive training for your marketing function, best practice tools, and financial promotions assurance reviews (including website reviews). Our team is dedicated to helping firms manage the complex regulatory landscape and ensure compliance with the latest regulations.

For more information or to discuss the finalised guidance, please get in touch with us at [email protected].

You can read the FCA guidance on financial promotions on social media here FG24/1: Finalised guidance on financial promotions on social media | FCA