Reed Smith In-depth

Key takeaways

  • Financial promotions on social media are still financial promotions and so the FCA’s rules apply.
  • Given their increased use of social media to promote their products and services, firms need to be alive to the particular issues the medium raises.
  • Issues such as ensuring standalone compliance, the prominence of risk warnings, the involvement of unauthorised persons and the extra-territorial effect of the rules pose particular challenges when social media is used.

Autoren: Romin Dabir Anglee Kumar

Young girl using smart phone

Social media platforms have become a popular and influential channel for advertising financial products and services to consumers. However, this also poses significant risks of consumer harm due to the wide reach and accessibility of some of these promotions. To address these risks, the Financial Conduct Authority (FCA) has published Finalised guidance on financial promotions on social media (FG 24/1) (Guidance).

The Guidance focusses on how firms and others, such as influencers, should communicate financial promotions on social media in a way that is fair, clear and not misleading, and supports consumer understanding and good outcomes.