A recent FCA crackdown on rogue finfluencers will make the internet a safer place for unsuspecting investors. The rise of financial influencers in recent years is mostly seen as positive, with financial advice reaching people it’s never reached before. However, a minority of individuals are taking advantage of social media users by encouraging them to sign up for scam investments.
Fake Finfluencers
There are thousands of genuine finfluencers, or finance influencers, operating on social media channels such as Instagram. Many produce unbiased, sensible content, but others have nefarious objectives. Fake finfluencers are those who purport to help social media users make the right decisions in their investments but are selling or marketing a dodgy investment product. You can often spot these fake influencers by the supposed lavish lifestyle that is depicted in their content or by the unrealistic promises they make. For example, if an influencer tells you they know a way to become an overnight millionaire, then you can pretty much assume it’s a scam.
Crackdown on Rogues
This recent crackdown has been brought about by the UK’s Financial Conduct Agency with the help of other regulating bodies in Italy, UAE, Australia, Canada and Hong Kong. A week of action began in early June and resulted in 50 warnings, seven cease-and-desist letters, four interviews and three arrests. Criminal proceedings will begin against those that have been arrested.
FCA Compliance
Not all finfluencers are FCA compliant, which is a necessary step for traditional financial advisers working in the UK. If you’re thinking of becoming a financial influencer or financial adviser and you want to show your followers or customers that you are legitimate, then it’s essential that you become FCA compliant. You can speak to FCA compliance consultants such as https://www.adempi.co.uk/ for further advice.
Many influencers are operating safely, but it’s hard for the average internet user to know the difference between unbiased and biased finfluencers. Check their credentials – for example, are they FCA compliant? Look out for too-good-to-be-true promises, lavish settings or unbalanced advice that tries to steer you towards a certain investment product.