Influencers, Risky Investments, and FCA Warnings

The FCA, or Financial Conduct Authority, is the UK regulator ensuring financial markets work fairly and protect UK consumers

---

The FCA has raised concerns about influencers—social media personalities promoting financial products—especially when those products are complex or high-risk.

The FCA explained: “We are particularly worried about influencers promoting financial products and services without understanding the rules. Many don’t realise they could be making illegal financial promotions."

The FCA noted that young people are most at risk. “Evidence shows that influencer marketing is attracting younger consumers who may not be able to afford the risks involved. Our research found that young, inexperienced individuals are more likely to rely on social media to make investment decisions, increasing the potential for harm.”

The FCA is also seeing more unregulated "educators" promoting trading courses. These courses often encourage risky strategies like day trading or swing trading and charge high fees.

Consumers enrolling in these courses are frequently directed to firms offering trading services, such as those providing Contracts for Difference (CFDs). This referral process often includes financial incentives for the course providers.

The FCA's message is clear: think carefully before following advice from social media influencers or signing up for expensive trading courses, especially when they involve high-risk strategies.

How to Protect Yourself: Tips for UK Consumers

1. Check if your adviser is regulated by the FCA:

   • Use the FCA’s Financial Services Register to confirm your adviser or firm is authorised and regulated in the UK.

   • Search by name or firm reference number (FRN) to verify their qualifications.

     
     

2. Ensure your adviser is fully qualified:

   • Look for advisers with recognised UK qualifications such as DipPFS or similar, ensuring they meet professional standards.

     
     

3. Be cautious of high-pressure tactics:

   • Avoid anyone pushing you to act quickly or promising “guaranteed returns.” Legitimate UK advisers will give you time to consider your options.

     
     

4. Don’t rely on social media influencers for financial advice:

   • Many influencers lack proper qualifications or may not be aware of UK financial regulations, putting your money at risk.

     
     

5. Research the product or service thoroughly:

   • Before investing, understand the risks, fees, and potential outcomes. Seek independent, regulated advice if unsure.

     
     

6. Be sceptical of expensive trading courses:

   • Verify the credibility of the course provider. These courses often promote risky strategies and may direct you to unregulated firms.

     
     

7. Ask for clear explanations:

   • A regulated adviser will explain how their advice suits your personal goals and circumstances, without jargon or pressure.

---

By following these tips, you can make safer financial decisions and avoid falling victim to risky investments or unregulated advice. For peace of mind, always consult a fully regulated financial adviser in the UK before committing to any financial product or service.

GET IN TOUCH