06 April 2023
If you are covering the FCA and ASA teaming up to educate influencers on get rich quick schemes, please find below a comment from Rio Stedford, financial planning expert at Quilter:
“The rise of social media has brought with it the introduction of ‘fin-fluencers’ – a murky world of popular accounts promoting financial schemes that are often better off never seeing the light of day. These accounts have helped to normalise the likes of FX trading and cryptocurrencies to a huge number of young people and this is having a profound negative impact. It is good, therefore, to see the FCA and ASA join forces to try and prevent these financial promotions from ever appearing in the first place.
“But as with any get rich quick scheme, they will continue to appear. What people need to know is that with these schemes comes the likelihood is that you will lose your money just as quickly as you made it – if you ever do make money that is. In some cases, you may even be defrauded altogether. They are pure gambling and social media influencers, and the platforms themselves, should know better.
“People naturally have a fear of missing out, and these schemes prey on this fear to get people in. However, if that is the main reason for investing then people need to re-evaluate their investment strategy. There needs to be much greater understanding of what constitutes investing, trading and gambling. They are very different things, and yet language of one category is getting co-opted into the others. Investing is a get rich slowly activity and it is better to invest through reputable financial institutions, rather than someone who is getting paid to post about a particular investment or product.
“It is also time the Online Safety Bill came into law and start banning any fraudulent financial adverts from appearing in the first place. The digital world has become an incredibly difficult place for a beginner investor or young person interested in finance to navigate, but it is crucial that it is made simpler and less daunting. This announcement is a good step in that direction, but more can and should be done.”
