This article explores the FCA’s most recent updates in relation to financial promotions on social media by financial influencers “finfluencers” and instances where if inaccurate or untrue comments are made, this may lead to an action for defamation.

The FCA’s Guidance

Over the summer in 2023, the FCA published a guidance consultation paper regarding financial promotions on social media (GC23/2). The consultation closed on 11 September 2023 with the final guidance being published earlier this spring (FG24/1).

Two main factors lie behind the update:

1. The implementation of the Consumer Duty, which came into force on 31 July 2023 for new and open products or services. Firms must now act to deliver good outcomes for consumers, ensuring their products or services are suitable for their target market, provide fair value, while improving consumer understanding of the products offered to them and providing appropriate support.

2. Firms are increasingly moving to online models to promote their financial services. As a consequence there has been a spread of financial services promotions by “finfluencers” on text-based social media sites like X (formerly Twitter) to the likes of TikTok and Instagram, as well as private channels, with an increasing use of pictures, videos and memes. Those “finfluencers” with young audiences may be promoting financial services in contravention of this restriction, without being aware of it.

The finalised guidance (FG24/1) has the objective of stemming the flow of illegal promotions – that is, promotions contravening s.21 of the Financial Services and Markets Act 2000 (i.e. the ‘financial promotion restriction’). All financial promotions must either be made or approved by authorised firms, unless a specific exemption applies (and these typically come with conditions). The guidance attempts to ensure that “finfluencers”, particularly those with young audiences, make financial promotions do so in line with FCA guidance.

Often, social media promotions fall short of being compliant with FCA rules by downplaying risk warnings or allowing risk warnings to be truncated. To assist firms, the finalised guidance contains a table which has examples of how businesses could promote their services on social media platforms in a compliant manner, along with what a non-compliant promotion may look like:


Features of a prominent risk warning

Does not comply with our expectations 

Stories and carousel posts (e.g. Instagram posts with multiple pictures)

The risk warning is clear and prominent, on every slide containing the financial promotion. Consumers should see the risk warning as soon as they view the financial promotion.

The risk warning is significantly smaller than the other written content and found in the last slide of the financial promotion.

Livestreams (including gaming streams such as Twitch)

The risk warning is displayed clearly and prominently on the screen for the duration of any part of the stream involving the communication of the financial promotion.

The streamer makes no mention of the risk warning while communicating the financial promotion.

Character-limited media

The entire risk warning is displayed clearly within the text. Where necessary, prescribed shortened risk warnings have been used.

The risk warning has been truncated in such a way that it ceases to comply with applicable rules.


Short-form video content (e.g. TikTok)


The risk warning is clearly and prominently displayed across the screen throughout the financial promotion.

The risk warning is found within the caption of the video, or the benefits are given disproportionate prominence (e.g. through use of flashing text or the dialogue in the video).

Long-form video content (e.g. YouTube)

The risk warning is displayed clearly and prominently on the screen for the section of the video involving the communication of the financial promotion.

The risk warning is displayed at the end of the video rather than when the financial promotion is being communicated.

Key suggestions made by the FCA on how firms can avoid these pitfalls include:

  • Showing risk warnings just before or at the start of promotions;
  • Making promotions clear and understandable even for non-intended recipients;
  • In addition to risk warnings, including links to provide more detail;
  • Considering whether social media is the appropriate platform for certain types of promotions;• Restricting and directing promotions for cross-border firms by using separate profiles or geolocation.
  • Questioning how firms should deal with the risk of forwarding and sharing;
  • Question whether affiliate marketing is in place and what protective steps need to be taken.

Certain investments (such as non-mainstream pooled investments and speculative illiquid securities) are already barred from mass marketing to retail investors. These should not be promoted on social media as they could end up on the screens of unsophisticated investors.

Echoing the concerns raised for social media “finfluencers” referred to above, the guidance further warns firms that they may be responsible for affiliate marketers (such as “finfluencers”) which they engage. Firms are advised to monitor these affiliates and not hire more than they can manage. If they use “finfluencers”, they must ensure the latter understand what they are promoting and direct them on compliance.

However, and rather critically, the FCA has stopped short of introducing additional rules for monitoring or ensuring compliance with financial promotion rules for firm, as it believes the existing regulatory regime is sufficient for dealing with the risks inherent in such arrangements.

Illegal promotions are a serious matter for which the maximum penalty is up to two years imprisonment, an unlimited fine, or both. Indeed, the FCA has recently pursued prosecution against individuals promoting an unauthorised trading scheme via their social media account, to demonstrate their zeal in clamping down on unauthorised and non-compliant promotions made via these channels.

For authorised firms who make or approve promotions that fall short of FCA standards, the situation is different, but having contravened FCA financial promotion rules, they too may be exposed to supervisory or enforcement action.


The guidance stops short of introducing additional rules which will be a relief to many firms who may already feel they have much to consider in terms of compliance for financial promotions. However, what is clear is that FCA expects firms to monitor those it engages to make promotions on its behalf to ensure that they comply with the existing rules. Firms should review the guidance and consider whether their current practices are in line with the FCA’s recommendations.

Whilst it may have not been in the mind of the FCA when putting together their guidance, there is also a risk of the “finfluencers” and firms being liable for defamation by posting financial promotions which are inaccurate or untrue. These promotions do not need to have the intention to mislead or be inaccurate but simply need cause, or be likely to cause, serious harm to the reputation of third party. An example of a statement of this nature may be where a “finfluencer” employed by the firm, refers to the financial services of a competitor as being non-compliant or being used for fraud, when this is not true. In this instance, the “finfluencer” could face allegations of defamation for posting a libellous comment, and the firm could face similar allegations by being found to be vicariously liable.

Whilst agreements are not dealt with in detail in the finalised guidance, it is apparent that setting out clear parameters would assist firms and influencers in understanding their obligations. These “influencer agreements” would also assist in reducing potential litigation which may arise as a consequence of unauthorised communications. On the other hand, if either “finfluencers” or firms are facing allegations of defamation and require assistance to respond to the same, please feel to contact Humna Nadim in our Reputation Management Team.


Written by:

  • Humna Nadim (Managing Associate - IP, Tech and Data)
  • Sam Omozusi (Associate - Financial services regulatory)


This publication is intended for general guidance and represents our understanding of the relevant law and practice as at May 2024. Specific advice should be sought for specific cases. For more information see our terms and conditions.

Date published

31 May 2024


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