FCA finalised guidance on social media financial promotions

Updated guidance published

On 26 March 2024, the FCA published its finalised guidance on financial promotions on social media (FG24/1). The FCA consulted on the draft version of the guidance in its guidance consultation GC23/2, which was published in July 2023 (see our August 2023 update). 

The finalised guidance replaces previous guidance on social media and customer communications (published in March 2015). 

FCA's expectations in the age of social media

Social media has developed drastically since 2015, with new platforms emerging and existing platforms expanding their offering. The guidance clarifies the FCA's expectations for when firms and others communicate financial promotions on social media, now an increasingly important part of firms' marketing strategies, and addresses emerging consumer harm that has resulted from its use. 

Financial promotion rules are technology neutral

The FCA's financial promotion rules are technology neutral and apply across all advertising channels, not just social media. No new obligations have been created by the non-exhaustive guidance. Instead, it indicates how firms and others might approach complying with their existing regulatory obligations. For unauthorised persons, including influencers, or "finfluencers", and other affiliate marketers, the guidance explains when their communications might fall within the FCA's regulatory perimeter and how the rules apply to their activities.

Influencers beware!

The FCA gives a clear warning that unauthorised persons, like influencers, who promote financial products or services that are subject to regulation without the approval of an FCA authorised person, may be committing a criminal offence (which can lead to two years' imprisonment or an unlimited fine). Authorised firms working with influencers or other affiliate marketers should take proactive responsibility for how the promotion is communicated, and influencers themselves should consider whether they are the right person to promote a financial product or service. The FCA and the Advertising Standards Authority have created an infographic, which influencers can use to help them make this decision, and it also highlights when they may be at risk of communicating financial promotions illegally. 

Consumer Duty

The Consumer Duty is an important underlying theme that firms must always consider in order to deliver good outcomes for retail customers. Under the Consumer Duty, financial promotions must support retail customer understanding and communicate information in a way that equips them to make effective decisions. 

The FCA wants financial promotions on all advertising channels to be fair, clear and not misleading, and to support consumer understanding. It wants firms to ensure that promotions provide a balanced view of the benefits and risks, and clearly communicate information that will help consumers make effective and well-informed decisions. 

Memes may be caught

Social media enables firms to quickly promote their products and services to an ever-growing audience, and any type of communication can be a financial promotion which is subject to this restriction, even memes. 

Keeping on the right side of the law and regulation

When promoting products and services, firms and influencers should always consider the updated guidance, alongside other relevant rules and legislation.

Our team has significant experience in assisting firms with their financial promotion policies, procedures, systems and controls, and ensuring they remain compliant with FCA regulation and guidance.