The FCA has done a pretty good job in cracking down recently on scams and dodgy financial promotions, stung into action by some major failures over the last few years.
It’s having less success playing ‘whackamole’ with the legion of social media influencers and hucksters who pervade some parts of the internet.
It’s worth stating here that some helpful social media ‘finfluencers’ giving advice on YouTube or other platforms actually do a good job in sharing budgeting or saving tips. These consumer ‘advisers’ can prompt people into taking action or provide some new financial ideas.
As long as they do not stray into giving regulated financial advice, there is nothing wrong with these. The problem is with misleading, get-rich-quick merchants who try and flog a course offering a passport to riches or, in some case, encourage investors to put money into rogue investments schemes, often bitcoin, trading or currency related.
The problem is differentiating between the helpful advice and the dud advice.
The FCA has promised to do more to intervene but its latest figures suggest trouble in stemming a rising tide.
During 2022 the regulator forced firms to amend or remove over 8,500 financial promotions, 14 times the number it dealt with in 2021. Some of that was due to better ’surveillance’ tools at the FCA to monitor suspect promotions but there is little doubt more people are getting in on the act.
While all this is of concern, there is also the danger of regulated advisers inadvertently falling foul of the rules.
The FCA quoted an interesting case this week where the director of a regulated firm used their personal profile to promote the advice of unauthorised traders and other financial products. The FCA blocked them from using their personal social media to promote financial services and imposed a requirement on the firm to halt any financial services promotions.
We have also in recent times had cases where some regulated firms have used their permissions to get involved in areas where they had no permission, effectively using regulated status to open the door to more lucrative dealings.
All this is worrying but Financial Planners can play their part here by tipping off the FCA about rogue promotions and suspect ‘finfluencers.’
While the social media platforms and search engines are doing their bit, a combined campaign by the industry will be most effective. Monitoring every part of social media is just too big a job for one regulator.
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Kevin O’Donnell is editor of Financial Planning Today and has worked as a journalist and editor for over three decades.
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