From loud budgeting to girl math, there’s financial advice aplenty on social media—the problem is, not all of it is reliable. So the Financial Conduct Authority has stepped in with fresh guidance for those who dish out financial tips online.
Now influencers can face as long as two years in prison, an unlimited fine, or both if they don’t provide proper risk warnings when advising consumers on financial products.
The U.K. watchdog warned in a 47-page report that this guidance extends to memes, gaming streams, and reels.
“Any marketing for financial products must be fair, clear, and not misleading so consumers can invest, save, or borrow with confidence,” Lucy Castledine, director of consumer investments at the FCA, said in a statement.
“Promotions aren’t just about the likes, they’re about the law,” Castledine warned. “We will take action against those touting financial products illegally.”
The regulator cautioned that the new rules even apply to communications that originate outside the U.K. if they are capable of having an effect in the country.
Gen Z relying on social media for financial advice
The toughened stance comes as young people shun traditional financial advisors and banks in favor of social media.
TikTok—the birthplace of girl math, loud budgeting, and “my payday routine” videos—is arguably the go-to platform for money hacks.
The hashtag #FinTok has a staggering 4.8 billion views on the site as more than a third of Gen Zers rely on influencers as their main source of financial information, according to research by Intuit Credit Karma.
In contrast, less than a tenth said they would head to a financial services provider for similar help.
Another report from found that Gen Zers are more likely than any other generation to engage with financial content on TikTok, YouTube, and Instagram.
But while regulators typically require financial services professionals to follow strict rules, including disclosing any conflicts of interest or financial incentives with their recommendations, only 20% of the finfluencer investment content contained any form of disclosure.
There’s also been a rise in celebrities backing investment opportunities and handing out unregulated advice on social media.
Just last year, actress Lindsay Lohan, rapper Akon, and singer Ne-Yo were forced to pay tens of thousands of dollars to settle claims they promoted crypto investments to their social media followers without disclosing they were being paid to do so.
Kim Kardashian was also slapped with a $1.26 million fine for promoting Ethereum Max without disclosing to her followers that it was a paid promotion.
The FCA has already taken down 10,000 ‘misleading’ ads
The FCA said it has already stepped up “scrutiny of financial promotions,” adding that last year it asked firms to take down over 10,000 “misleading adverts” from social media—up from around 8,500 in 2022.
It’s even asking businesses to reconsider whether social media, where platforms have “limited characters or space,” is the right place to promote complex products.
But for those who choose to promote paid-for or unregulated financial advice or products online, the regulator has provided some strict guidance: Risk warnings on TikTok and YouTube should be visible throughout videos containing financial promotions and not just feature in the post’s caption.
Similarly, on social media posts with multiple photos, like an Instagram carousel post, risk warnings must be included in every picture.
The FCA concluded that while consumers need to be wary of online scams and questionable ads, it’s important for influencers to ensure they remain on the “right side of the rules and consider what would happen to their own reputations if they’re found to promote products illegally.”
