The rise of finfluencers: Who are they and why are they causing concern?
By ITV News Producer Lucy Fitzsimons
There has been a huge rise in the number of finfluencers on social media platforms like TikTok and Instagram in recent years, with many young people now turning to them for financial advice.
Finfluencers are social media influencers who promote financial products and share advice with their followers.
However, not all of them are qualified or authorised by the regulator to give financial advice.
This is concerning the Financial Conduct Authority (FCA) who say consumers, particularly younger people, show high levels of trust in these types of influencers - despite their information sometimes being misleading.
Finfluencers are now being warned by the financial regulator to check the products they promote to ensure they are not breaking the law or putting followers' money at risk.
It comes as the FCA said they are interviewing 20 influencers under caution in an attempt to crack down on those who illegally promote financial products.
But who are finfluencers and what is the law around financial promotion?
Who are finfluencers?
Finfluencers are a type of social media influencer who promote financial products and give advice and insight to their followers.
This can include the promotion of investment schemes, credit lending and debt solutions.
There has been a significant rise in these types of influencers in recent years, with some attracting millions of followers on platforms including TikTok and Instagram.
Younger people are increasingly turning to finluencers for financial advice, with nearly two-thirds (62%) of 18 to 29-year-olds following them, according to the FCA.
Three quarters (74%) of those also said they trust their advice and nine in ten young followers saying they have been encouraged to change their financial behaviour, the regulator said.
What are the concerns around finfluencers?
Not all finfluencers are FCA-authorised and may be unqualified to give financial advice, raising concerns around their practices.
The regulator has warned they need to check the products they promote to ensure they are not breaking the law or putting followers' money at risk.
Algorithms on social media platforms mean that catchy posts may be prioritised over quality, according to the World Economic Forum (WEF).
The WEF also said there are concerns around conflicts of interests between finfluencers and their audiences, as they can earn thousands of pounds for brand advertisements.
The FCA has issued 38 alerts against social media accounts operated by finfluencers which may contain unlawful promotions.
They said 20 unnamed finfluencers are now being interviewed by the FCA under caution as a result of concerns around their practices.
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How can you protect yourself online?
The FCA recommends that anyone looking to buy a product should check their register first to ensure the company is safe and genuine. If things go wrong and the company isn't authorised, then you won't have access to the Financial Services Compensation Scheme or the Financial Ombudsman service.
They also recommend consumers to check their warning list. This contains details of unauthorised firms and individuals that they have put out alerts against.
They say consumers should ask themselves these questions before making decisions on investments:
1. Am I comfortable with the level of risk? Can I afford to lose my money?
2. Do I understand the investment and could I get my money out easily?
3. Are my investments regulated?
4. Am I protected if the investment provider or my adviser goes out of business?
5. Should I get financial advice?
What is the law around financial promotion?
Providing financial advice without FCA authorisation, or promoting a regulated financial product or service without the approval of a FCA authorised person, can be a criminal offence.
Under the Financial Services and Markets Act 2000 "a person must not, in the course of business, communicate an invitation or inducement to engagement in investment activity". This does not apply if the promotion is communicated by - or the content is approved by - an authorised person.
An authorised person must comply with the FCA's rules, which generally require promotions to be "fair, clear and not misleading."
A breach of this law is punishable by an unlimited fine or up to 2 years imprisonment - or both.
Have any finfluencers been held accountable?
The FCA has taken action against nine individuals for the alleged promotion of an unauthorised investment scheme.
Eight of these individuals appeared in court earlier this year on charges relating to offering an unsanctioned financial venture to their Instagram followers. All pleaded not guilty to the charges, with a trial set for early 2027.
Former Towie cast member Lauren Goodger and reality stars Jamie Clayton and Scott Timlin are among those accused.
Love Island contestant Eva Zapico, who was unable to attend the hearing in July, is also due to appear in court in October to enter a plea for the same charge.
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