Blog

What has happened?

In March 2024, the FCA set out in its Finalised Guidance FG 24/1 how financial promotions made on social media channels must be fair, clear and not misleading, meaning that they must have balance and carry the right risk warnings so that users can make well-informed financial decisions.

What are the key points of the FCA's finalised guidance?

Social media has become a central part of firms’ marketing strategies. Firms are responsible for all their promotions, and the FCA has warned that they need to ensure that influencers they work with communicate with their followers in the right way.

Influencers must understand that promoting a financial product without approval from an FCA-authorised person with the right permission could be a criminal offence.

The FCA expects financial promotions to be standalone compliant. This means that each communication must comply with the rules when considered individually.

When assessing how to ensure that information is prominent in promotions communicated on social media, firms should consider FCA guidance on prominence in financial promotions, which includes examples of good and bad practices.

Social media will not always be an appropriate channel to communicate promotions, since some financial products and services have complex features and risks that can be hard for consumers to understand. All firms should consider how suitable social media is for the promotion of their product or service.

High-Risk Investments (HRIs) are subject to specific promotion restrictions, which vary depending on the investment and are set out in the Conduct of Business Rules (COBS). Firms using social media to promote investment products should familiarise themselves with the relevant marketing restrictions for the products they are promoting.

Certain risk warnings are required to be displayed in promotions for certain financial products and services, such as High-Risk Investments and high‑cost short‑term credit (HCSTC).

Unauthorised persons communicating financial promotions which are capable of having an effect in the UK need to comply with the financial promotion restriction in the same way as any other unauthorised persons. This means ensuring that the content of their financial promotions is approved by an appropriate authorised person, or that their promotions are exempt under the Financial Promotions Order (FPO).

There are specific legal requirements when sending marketing material through electronic media. Firms should be aware of the Privacy and Electronic Communications Regulations 2003 (PECR) and the Information Commissioner’s Office Direct Marketing guidance. The Government has also consulted on extending the current bans on cold calling (unsolicited real‑time promotions) for pensions and claims management firms to cover all consumer financial services and products

How can we help you? 

Thistle Initiatives has supported firms for over 10 years as a trusted compliance and regulatory adviser. In addition to assisting firms as-and-when, our team of specialists can serve as your right hand in meeting and complying with FCA regulations. We understand the importance of staying up-to-date and compliant and are dedicated to providing the guidance and support needed to do so.

Are you looking for help with your social -media-based financial promotions, influencer arrangements, or more general regulatory questions? If so, we can help in any of the following ways;

• Reviewing and commenting on your social media-based financial promotions, with particular reference to issues including the suitability of using social media, prominence, the use of risk warnings and the achievement of standalone compliance,
• Reviewing and commenting on promotions for High-Risk Investments,
• Reviewing how your use of social media or influencers ties in with your Consumer Duty obligations, including supporting consumer understanding.
• Assessing the strength or otherwise of your compliance monitoring oversight of promotions and influencers, including affiliate marketing,
• Assessing influencers’ degree of compliance with the specific requirements of the Advertising Standards Authority, and
• Assessing your compliance with the Privacy and Electronic Communications Regulations 2003.

Contact our specialist team now to schedule a free consultation. Get in touch with us by calling 020 7436 0630 or sending an email to info@thistleinitiatives.co.uk.