Social media and content creation have begun to play an integral role in a wide range of commerce and service-based landscapes, and ours is no exception. Where once entertainment was the sole driving factor behind a piece of content, creators now use their platforms to achieve specific goals by targeting specific audiences. This has given rise to a number of new-wave influencer strategies, where content creators leverage the authority they have over their audience to deliver knowledge or advice that may or may not be as ‘expert’ in as they should be.
Finfluencers are one of the latest trends to come out of the content creator scene. Read further to learn what finfluencers are, what the FCA thinks about them and how they might impact financial services and its customer base in the coming months and years.
What is a finfluencer?
While there is no finite definition for what a finfluencer actually is, one can be described as a content creator active on social media who promotes financial products and services to their audience. The products promoted by a finfluencer will likely vary from user to user, but the most common cases involve saving, investing, property management and cryptocurrency promotions.
The driving force behind the rise of finfluencers can likely be attributed to the same reasons why most influencer marketing schemes have such success. When customers are dealing with major purchase decisions which require significant investment, they may see finfluencers or influencers as non-biased and only acting with the content viewer’s best interests in mind.
Why might finfluencers cause problems for you and your customers?
So why might finfluencers be seen as a problem in the market, and who are they harming if that is the case? You, as the broker, or your retail customers? Well the answer to these questions is complicated since it will vary case by case. Provided an influencer is informed and educated on the product or service they are promoting, and their posts are deemed ‘responsible’ by the Financial Conduct Authority, finfluencers may actually be an asset to the market, as they support buyers in assessing their options and recognising they have a number of options when it comes to the products being targeted towards them.
Issues arise however when a content creator begins to promote illegitimate ‘get rich quick’ schemes or generally being irresponsible when communicating with the audience. It is in these circumstances that your customers could be exploited, leading to an all-round distrust of those in financial services even when you genuinely do prioritise their best interest. Click here to have a read of the infographic created by the FCA and ASA, which summarises how finfluencers can ensure their posts are responsible and outlines what sanctions they may face if their guidelines aren’t followed.
Finfluencers and the FCA
With the potential of having such a major impact on the industry, it should come as no surprise that the Financial Conduct Authority has been keeping a watchful eye on the UK finfluencer scene. Included in their 2023 market roundup which you can access by clicking here, the FCA noted that an ‘increase in the number of bloggers and influencers (finfluencers) on social media promoting financial products, particularly investment products’ had been seen.
The FCA also stated that much of this promotion was being targeted towards younger age groups, such as students. This fact, coupled with the ongoing trend of finfluencers promoting illegitimate or unregulated products on behalf of unauthorised third parties is obviously a concern for the Financial Conduct Authority. ASIC (Australian Securities & Investments Commission) actually identified that up to 28% of 18 – 21 year olds followed at least one finfluencer on social media [1]. In response, the organisation has implemented a number of measures including:
- Requesting major platforms like Instagram, TikTok, Facebook etc. remove harmful finfluencer content to disrupt illegal financial promotions.
- Increasing their proactive search capabilities in identifying and removing a greater volume of illegal financial promotions.
- As stated previously, they worked in conjunction with the ASA to develop the guideline infographic to great success – Love Island contestant, Sharon Gaffka promoted the infographic on her Instagram and TikTok accounts, detailing her journey as an influencer and the value of the new guidance.
- Organising round table events for agents of finfluencers, where they can learn how to prevent customer harm at the source.
- Continuing to work with other regulators, social media platforms and trade bodies to better educate finfluencers on their obligations.
Are you considering becoming a finfluencer?
As an authorised mortgage broker or protection adviser, the thought of using your social media platforms as another channel for supporting customers might be an attractive proposition. You already have the market knowledge and a loyal customer base, so why not make the most of this new opportunity? PRIMIS are one of few networks that allow appointed representatives to actively post on social media, subject to you obtaining your social media licence which you can learn about here.
What you must keep in mind however is the aforementioned standards and practices outlined by the FCA. If you need a refresher on what that entails, you can get in contact with our financial promotions team at financial.promotions@primis.co.uk. We also recommend having a read of our Financial Promotions Guide below which features a dedicated guidance section on influencers and the responsibility we have as a network in approving their content.
Any content you post must be submitted, assessed and then approved by our Financial Promotions team prior to posting, in addition to all network introducer processes being upheld. Any communication published irresponsibly without this authorised entity approval is subject to criminal offence under Section 21 of the FSMA.
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