The FCA has published its updated guidance on social media advertising. The guidance applies equally to firms and promotors, including influencers. It does not contain any new obligations, but is a reminder of regulatory expectations. It reminds firms that they need to make sure influencers who they work with communicate with their followers in the right way. It also reminds influencers that they risk committing a criminal offence if they promote financial products without the proper approvals from an appropriately authorised firm.
The guidance builds on firms’ obligations under the Consumer Duty, and makes (and in most cases reiterates) the following key points:
- financial promotions must be standalone compliant – the guidance addresses how firms can enhance clarity of communications through layering, and how the FCA will look to take a proportionate view on clarity when looking at dynamic media;
- promotions must be balanced and contain information to help consumers make effective and well-informed decisions – and among the things they should bear in mind are the target audience and any areas that might be confusing;
- some promotions just may not be suitable for social media, for instance because consumers would need a significant amount of information properly to understand the product;
- required risk warnings must appear prominently throughout the promotion and not be obscured or truncated;
- firms should take proactive responsibility for what their affiliate marketers are doing;
- influencers must remember that even if they do not have a commercial relationship with a firm, their communications could nevertheless be subject to the financial promotion restriction;
- influencers should consider whether they are the right person to promote a product, and should also comply with other relevant requirement like the ASA’s expectation that any paid activity should clearly be labelled as an ad, and the additional ASA guidance on incentives and unregulated BNPL promotions.
Throughout the guidance, the FCA gives examples of compliant and non-compliant promotions of a variety of products and services.