TV Reality Finfluencers Charged Over Investment Promotion

A number of TV reality stars that have now become influencers on social media with millions of followers have been charged with promoting directly or indirectly investment products when they are not authorised and regulated by the Financial Conduct Authority to do so.

Promoting regulated financial services when you are not authorised to do so is a criminal act under the Financial Services and Markets Act (FSMA).

In one case, it is a alledged that a social media ‘star’ advised on and promoted Contracts for Difference Products (CFDs) when it is against the law unless authroised and qualified to do so.  They are knowm in the financial services industry as ‘finfluencers’.

CFDs are when investors access financial ‘gambling’ platforms and place ‘bets’ based upon whether the exchange rate of a currency or the stock market for a particular index such as the FTSE 100, S&P 500 etc. will rise or fall.

The FCA estimates that up to 80% of investors lose money when investing in CFDs.  It is literally gambling when you have little if any knowledge.

Regulated products can only be advised on and promoted by authorised and regulated firms with the necessary expertise and experience to deal in such high risk investment areas.

Comment

This is all well and good and we welcome the clampdown but we have long campaigned to stop ‘celebrity’ endorsements of certain financial products including over 50s life cover when in fact many of them are such poor value.

In addition, journalists are immune and excluded from the FSMA, so they are free to comment on the industry, products, advice and sales with usually no financial services qualifications or knowledge.  Admittedly, some jounalists have more experience and are better than others in creating consumer awareness but it makes us cringe when you se or read things in the media that are technically incorrect and there are no repercusions for poor jounalism and research.