Financial influencers: Influencer agreements and FCA compliance

Financial influencers: Influencer agreements and FCA compliance

The recent news of former reality TV stars facing a 2027 trial for promoting an unauthorised Instagram trading scheme underscores the significance of recent guidance from the financial regulator, the Financial Conduct Authority (FCA). The FCA has previously warned financial influencers (also referred to as finfluencers) to stay on the right side of the rules and keep their social media adverts lawful. 

In a press release, the FCA emphasised the importance of maintaining lawful practices in social media advertising within the financial sector. Specifically, the FCA has warned influencers to make sure their ads are lawful when promoting financial products on social media.   

In this article, our financial services solicitors explore the FCA’s recent guidance and the important reminder it gives to influencers. The guidance highlights that promoting a financial product without the content of the promotion being approved by an FCA-authorised firm with the appropriate permission, or being able to rely on an exemption, may constitute a criminal offence. Our commercial solicitors also consider how influencer agreements can help to protect your business and your brand to ensure that you comply with the FCA’s guidance. 

Who can approve financial promotions?  

Only authorised persons can approve financial promotions to be made by unauthorised persons. Authorised persons are entities that have received permission from the FCA to communicate or approve financial promotions under the financial promotions gateway in the context of carrying out regulated activities. 

Social media guidance for FCA-authorised persons and unauthorised influencers 

The FCA’s guidance for firms it regulates, as well as unauthorised influencers, sets out its expectations in relation to social media financial promotions. The guidance reiterates, amongst other things, that adverts must be fair, clear, and not misleading. This means that, despite the limited space on some social media platforms, each advert must be ‘standalone compliant’ by having the right balance and containing the appropriate risk warnings.  

Social media audiences should be equipped with enough information from the promotion to enable them to make effective, timely and properly informed decisions. The FCA has updated existing guidance to take account of some new features of social media and to re-enforce the Consumer Duty and obligations under the Financial Promotions regulations.  

The updated guidance also provides examples of compliant and non-compliant social media adverts, to assist influencers in complying with the guidance. 

Under financial services laws it is illegal to communicate a financial promotion unless:  

  1. You are an authorised person/a regulated firm, i.e., you have permission from the FCA to carry out regulated activities; or 
  1. The content of the financial promotion has been approved by an authorised person; or  
  1. An exemption applies (guidance which can be found in the FCA’s Perimeter Guidance manual at PERG 8.11, which provides the regulator’s views on compliance with regulations).  

The FCA’s guidance is also aimed at influencers who: 

  • Are directly compensated by an authorised person, its affiliates, or a social media platform for promoting the firm’s services. 
  • Promote a firm’s services with a view to future profit (for example, a future relationship with the firm where the influencer does not have an existing affiliation with the firm). 
  • Promote chat rooms or investment products in which they have a commercial interest or from which they benefit. 

As a result, a firm working with influencers needs to take responsibility for how its influencers communicate financial promotions, including by way of appropriate monitoring and oversight.  This can be an extensive task as the law has a wide territorial scope, covering communications made outside the UK if they are capable of having an effect within the UK. 

Poor social media advertising practices identified by the FCA include: 

  • Promotions that contain all of the benefits within the video or image content, whilst the associated risks are not given the same prominence (for example, only being detailed in a caption below the content).  Such promotions lack balance and are likely to be unfair and/or misleading. 
  • Failing to tailor a communication to the characteristics of the target market and communication channel, to ensure that they are likely to be understood. 
  • Promotions that do not include prominently placed fee information. 
  • Promotions that include incentives to invest (which are banned). 
  • Leaving it to unregulated affiliates (including influencers) to ensure that promotions are communicated in compliance with the FCA’s rules. 
  • Little or no ongoing monitoring of communications made by affiliates (including influencers) to ensure that they remain compliant during their lifetime. 

Influencer agreements and complying with FCA Rules 

The consequences for regulated firms and influencers of violating the financial promotions regime are significant: potentially criminal prosecution resulting in an unlimited fine, up to two years in prison, or both. The FCA’s recent warning, serves as an important reminder of the potential pitfalls in social media advertising for influencers and the companies they endorse.  

This is a high-risk area where non-compliance can result in serious trouble for the influencer and severe damage to the reputation of the brands associated with the influencer. As the FCA puts it, “firms are on the hook for all their promotions” – so any breach by an influencer of the law around financial promotions could also result in regulatory enforcement action being taken against the affiliated firm itself. 

Influencer agreements can play a vital role in mitigating risk.  They can include clear influencer obligations in relation to compliance with applicable rules and guidelines on financial promotions.  

The FCA’s track record of acting against influencers emphasises the importance of adhering to the rules. Ensuring that influencers communicate transparently and abide by their contractual obligations is crucial for a regulated firm to safeguard its brand image and maintain consumer trust in social media marketing. 

How can we help you? 

It is good practice to have an influencer marketing agreement in place to ensure that your influencers comply with the rules. Our commercial solicitors can assist you with this so that your influencer agreements include appropriate obligations and provisions dealing with breaches of the rules and those obligations by the influencer.  

If you are using an influencer to communicate financial promotions, they must understand your product and the regulatory requirements they must adhere to, and you must ensure you monitor their activity effectively. 

Our Financial Services solicitors can provide additional support when drafting your influencer agreements to reflect the FCA’s guidance on financial promotions. They can also help you keep up to date with the FCA’s requirements to ensure that both you and your influencers are compliant. 



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