The FCA's Crackdown on Finfluencers: What It Means for Investors

The Financial Conduct Authority (FCA) has recently intensified its action against social media 'finfluencers' promoting financial products without proper regulation, with 20 influencers now being interviewed under caution. This targeted crackdown highlights a crucial point for investors—particularly those newer to financial markets: not all financial advice comes from qualified, licensed sources.

With lifestyle appeal, influencers can attract vast followings, but there are significant risks for investors who act on unregulated advice. As the FCA continues to increase scrutiny, it has issued 38 alerts against social media accounts operated by finfluencers that may contain unlawful promotions. The growing popularity of complex financial products like foreign exchange (FX) and contracts for difference (CFDs) on social media platforms further underscores the need for professional, regulated advisers.

The Importance of Regulated Advice

One of the most important steps any investor can take is to ensure they are receiving advice from a licensed professional. Financial regulations exist to protect investors from unsuitable products, high fees, and unmanageable risks. If you're making decisions about your pension, savings, or other investments, having a regulated adviser ensures that your strategy complies with both local and international laws, minimising potential pitfalls.

It’s not just the investment you need to evaluate—do your due diligence on the person advising you. Are they licensed in your jurisdiction? Do they have recognised qualifications? A professional adviser will always be transparent about their credentials, whereas someone who skirts regulation may not. Transparency is essential in helping you achieve your financial goals while safeguarding your assets.

Why Due Diligence Matters

With social media giving everyone a platform, distinguishing credible financial advice from harmful promotions can be challenging. According to the FCA's press release, nearly two-thirds (62%) of 18- to 29-year-olds follow social media influencers; among them, 74% trust this advice, and 9 in 10 young followers have been encouraged to change their financial behaviour. These statistics reveal the potential impact influencers have on younger, often less experienced investors.

The FCA's recent actions serve as a clear reminder of the potential pitfalls when following unverified advice. Conducting due diligence on both the investment product and the adviser can prevent costly mistakes in the future. Investors should always look beyond the surface—ask questions, seek clarification, and make sure they're comfortable with both the investment strategy and the adviser providing the guidance. Confirming that the adviser is properly licensed, qualified, and has a solid track record in financial planning is critical.Without verification, you risk trusting your finances to someone who may not be accountable for the consequences.

Skybound Wealth's Global Expertise

At Skybound Wealth, we take pride in providing licensed, professional financial advice across five continents. Our advisers are not only thoroughly trained, but they are also backed by an award-winning compliance team that ensures all advice is up to the highest regulatory standards.

Our global reach means we understand the intricacies of cross-border financial planning, offering advice that is tailored to each client’s unique circumstances. Whether you're managing pensions, investments, or looking for tax-efficient solutions, our advisers have the credentials and expertise to help you make informed decisions that protect your financial future.

Avoiding the Risks of Unregulated Advice

For investors, particularly expatriates or those dealing with complex international financial arrangements, the stakes are high. As the FCA’s crackdown demonstrates, unregulated advice can have severe consequences, leading to substantial financial losses. While shortcuts in financial planning may seem appealing, skipping regulated advice often results in costly errors down the line.

The takeaway for investors is straightforward: do your due diligence. Work with a licensed adviser who can provide the expertise and protection you need.Receiving regulated advice helps safeguard your investments and allows you to focus on building a secure financial future.

Take Action

If you want to ensure your investments are aligned with your goals and managed by a regulated, professional adviser, now is the time to act. Reach out to a trusted financial adviser who can guide you through the complexities of today’s financial markets and help protect your assets for the long term.