The relentless rise of unregulated finfluencers
Accessing financial advice used to be out of reach for many. But now, it’s on your commute, at the bus stop, and most dangerously, in your pocket.
Get out your phone, open any social media app, and you’ll see a young man or woman, backlit by a ring light holding a pocket microphone, promising to show you how to make your money soar.
They may be wearing a crisp button down and have a screen showing their investment portfolio behind them, while many take a more relaxed, informal approach, sat in their living room with a cup of tea, to show they are just like you.
These people are known as ‘finfluencers’, a demographic of influencers who try to sway lifestyle habits by promoting various financial products.
To the roughly 56.8m people using social media in the UK, these users can look like the gateway to turning around their financial fortune, particularly for those who find traditional advice and routes to wealth out of reach.
But unlike the cheery online chefs and social media librarians, their advice can lead to dangerous consequences.
Unregulated and irresponsible
Social media finfluencers are peddling advice to users across the UK, stretching from London to Glasgow.
But there is one pressing problem: They are unregulated, meaning regulators have not granted them authorisation to give advice.
These rogue influencers often promote complex, high risk-products, while failing to disclose cash payments from companies and concocting a lavish lifestyle to prompt viewers into making impulsive decisions.
The Financial Conduct Authority (FCA) and other regulators are cracking down, with the watchdog reporting a 174 per cent increase in actions against influencers in 2025.
Meanwhile, just over two weeks ago, seven finfluencers were fined and given cost orders in Southwark Crown Court for promoting an unauthorised foreign exchange trading scheme, violating financial promotion rules.
But while the watchdog is keeping a close eye on social media activity, enforcement levels are low, with the FCA taking just 74 actions last year, including arrests and written warnings.
Social media companies
Instead, attention is turning to social media companies, with financial bodies urging firms to take “greater responsibility” to stop fraudulent content reaching users.
Clare Francis, Director of Savings and Investments at Barclays Smart Investor, said: “The rise of finfluencers reflects a very real gap in the market.
“Where trusted support isn’t available, people naturally turn elsewhere, even when the information they’re getting may be unregulated or misleading.
“New technologies like AI and ‘deepfakes’ are making investment scams more common, with most of them beginning on tech and social media platforms.”
Francis added that “firms must take greater responsibility for preventing fraudulent content from reaching their audiences and stopping scams at source”.
But she acknowledged that the FCA’s Advice Guidance Boundary Review was also crucial, as it would “allow firms to provide ‘targeted support’ to customers, in the form of investment and pension suggestions” for those with similar characteristics and circumstances.
Social media damage
Scam finfluencer content is pushed on to unsuspecting audiences through heavy advertising, as well as users being paid on some platforms based on performance and engagement, incentivising them to post more.
But while finfluencers are making cash, their audiences are reporting losses, with 42 per cent of those who acted on social media advice admitted losing money, according to research from Barclays.
One in four confirmed feeling pressured to act quickly on unsolicited tips, which rose to 48 per cent among Gen Z.
Both banks and the FCA acknowledge that some influencers provide regulated, appropriate advice, which can help improve financial situations, but investment scams are becoming more common, in particular through new technology including AI and deepfakes.
The FCA confirmed it was continuing to take action against unlawful conduct, including issuing take down requests across big tech platforms for unlawful content and bringing criminal prosecution in the most serious cases.
The last line of defence
While pressure is mounting on social media companies to take control of the proliferation of unreliable investment advice, it is expected that banks will act as the last line of defence for a considerable time.
While banks have a duty to protect their customers from suspicious activity and payments, ultimately the providers must do so also to protect themselves, as they are found liable when failing to stop such payments.
Jonathan Frost, former fraud specialist at Canada Police who now works at anti-fraud firm Biocatch, which spots signs of financial crime off of patterns in behaviour, said: “The last sort of barrier to the criminal making their gain is the bank.
“We’ve got to try and work out what about your behaviour looks different to every other time you’ve made a payment…and it’s that behavioural intelligence that we use to give a score to the bank.”
Frost noted that while the Online Safety Act mandates that sites use measures to stop fraudulent content and scams, more needs to be done by regulators, sites and the government to crack down on finfluencers.
He said: “In reality, what’s actually required is an even effort across the entire chain. Working back from the banks, through telcos to tech companies.
“If we can build more barriers in the journey that victims go on, we will almost certainly reduce the criminal gain.”