The watchdog has reminded financial services firms that they are responsible for their promotions and must make sure influencers they deal with communicate to their followers in an appropriate manner, as social media plays a more and bigger role in business marketing plans.

Influencers are being cautioned that it may be illegal to promote a financial product without the consent of an FCA-authorized individual who has the necessary authority.

The FCA increased its monitoring of financial advertising last year and eliminated almost 10,000 deceptive advertisements, compared to about 8,500 in 2022.

In order to enable consumers to make well-informed financial decisions, the new guidelines specify how advertisements on social media platforms must be fair, clear, and not misleading. This means that they must be balanced and include the appropriate risk warnings.

According to Lucy Castledine, head of consumer investments at FCA, promotions are about more than just likes—they're also about the law. We'll deal with individuals who are unlawfully promoting financial products."

Finra levied its first social media influencer-related sanction in the US earlier this month, with M1 Finance being smacked with a $850,000 fine for posts made on the company's behalf.

Regarding the new FCA guidelines, Raza Naeem, a financial regulation partner at Linklaters, states that "Firms will need clear restrictions and/or processes in place to avoid falling foul of the rules, and to also train relevant employees and any finfluencers they collaborate with."