Have you fallen for a ‘finfluencer’ online?

The age of the finfluencer is in full swing. Today, the world’s new unexplored frontiers are rarely geographical. They’re digital. But what remains constant is the sense of lawlessness that comes with frontier life. How else to explain the modern morality tale of social media stars facing trial and possibly jail for promoting a foreign exchange trading scheme? By all means, check out finfluencers – but be aware that some will be operating illegally.

A modern finfluencer morality tale

It all started so innocently.

We all need a big break in life. And the car body repair specialist from Glasgow, Biggs Chris, got his on the reality show Love Island.

Fast forward a few years and he’s a social media personality. His c.150,000 Instagram followers get updates on property investments and all sorts of other things.

And that’s where the innocence fell away

Because he and some fellow reality TV stars promoted an investment scheme using contracts for difference to trade foreign exchange markets.

If a chartered financial planner wanted to talk to you about CFDs, as they’re known, let alone promote them on social media, I’d have to jump though a long row of legal and compliance hoops.

But no chartered financial planner would.

The difference

CFDs are an investment product used to bet on the price of an asset – in this case, foreign currencies. They are unbelievably risky. You can lose far more than your initial investment. You’d probably be better off putting money on the horses.

The Financial Conduct Authority – which regulates the financial industry, including First Wealth – also thinks it’s a terrible idea. They are prosecuting the personalities in question, Biggs Chris pleaded not guilty, and the trial is in early 2027.

The FCA has a helpline for anyone who believes they’ve lost money in this sordid and depressing story.

Finfluencer on the rise

Scams like this one – because let’s call it for what it is – seem to be commonplace these days. Scam and fraud complaints have now reached their highest-ever level.

Official data says they totalled a remarkable £1.2 bn in 2023.

But it’s hard to imagine people turning away from social media. Some 28% of people say it’s where they get most of their news about current affairs. Those numbers don’t show any signs of slowing down.

And it’s hard to see finfluencers – influencers who use social media to share financial advice – going away either. In America, more investors under 35 use social media for their information than they do financial professionals.

Not all influencers…

There are of course plenty of finfluencers who haven’t been sanctioned by social media. This Girl Talks Money and Mr Money Jar have about 50,000 and 70,000 followers respectively. Their content seems sensible enough, and they’re not likely to be heading to court with the FCA anytime soon.

Let’s also remember that one of the biggest finfluencers, Martin Lewis, better known as the Money Saving Expert, started life as a journalist and PR consultant. His company now has more than 200,000 followers on Instagram alone.

Finfluencers aren’t regulated like we are. They usually don’t have the same authorisations or qualifications you need to do the job of a financial planner, say. But then neither do The Sunday Times Money Section, BBC Radio 4’s Money Box, nor trade magazines. For instance, though Mr Money Jar is a ‘qualified’ financial planner, there is no indication as to how qualified. In most Independent Financial Advice firms like ours, you need to be Chartered (one of the highest qualification levels) to give advice.

The commonality

What we hope we all have in common is a desire to do good. To help people navigate the complex and confusing world of money, to achieve good outcomes. And, of course, to follow the letter and spirit of the law.

To that end, finfluencers can absolutely be a force for good. After all. A healthy society needs journalists and other independent people to hold the great and good to account.

But in the digital frontier, it’s important to remember not all finfluencers behave that way.

As the FCA said about the Biggs Chris case, “[Financial] promotions aren’t just about the likes, they’re about the law.”

And, as unscrupulous finfluencers are finding out, the law doesn’t care about their story, their big break, the clothes they wear. It cares about protecting consumers, which is how it should be.

If you’re worried about scams like the one above, the FCA consumer contact centre is on 0800 111 6768.

If you’d like to talk to a regulated expert about your money, we’re available on 020 7467 2700 and hello@firstwealth.co.uk.

This document is marketing material for a retail audience and does not constitute advice or recommendations. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested.