Today the FCA announced it was spearheading a global crackdown on rogue social media influencers. About time many will say.

The crackdown has been welcomed by many, including myself, but it's worth remembering that the situation is far more nuanced than many appreciate. I’ll come on to this later.

In the short term, however, the FCA deserves a pat on the back for trying to tackle the scourge of rogue social media influencers.

There is no doubt the FCA is taking a tougher stance with these influencers who often talk nonsense about financial matters or plug risky or dangerous financial products - and there are plenty of them doing this.

For the crackdown the FCA has worked with eight other financial regulators around the world. The operation has already resulted in three arrests in the UK and 50 warning alerts. Joint action with other global regulators is also a reminder that social media influencers can work from any jurisdiction and often do.

The problem here is that the latest crackdown is really a sticking plaster to cover a gaping wound and will be only a temporary bump in the road for many of the scammers and pushers convincing often inexperienced and vulnerable investors to waste their money on shoddy so-called investments.

What the UK really needs is to bring social media platforms into the regulated world. It is a massive oversight not bringing platforms such as YouTube, X, Facebook, Instagram and the rest under UK regulation (at least where they are targeting UK consumers). This needs to be tackled by primary legislation.

This would enable many more rogue social media influencers to be ‘de-platformed’ or ‘de-monetised’ very quickly.  Many make money from both the investments they push and from advertising received by platforms such as YouTube. Swift action when these influencers try to push risky products that are regulated in the UK would save a lot of people from being ripped off.

Here it’s worth remembering that there are also some excellent social media influencers providing some good general personal finance guidance on platforms such as YouTube. Many are highly respected Financial Planners. People like Pete Matthew and James Shack know their stuff and happily share their knowledge and experience.

These are people who should be encouraged by the regulators as they provide a public service and are already regulated. More encouragement for good advice on social media is a benefit to the sector and welcome.

For the rogue players who push bad financial products or suspect advice the FCA needs to power of law to force the social media platforms to take down bad content as quickly as possible and kick off the rogues.

Recent studies have suggested that many younger investors are increasingly influenced  by social media. Without affirmative action to chase the rogues away they will forever outnumber the good influencers by many times.

Many of the platforms will be reluctant to intervene because of the lucrative advertising revenue they generate but with signs that most scams now begin online they must be convinced that toeing the line is necessary if their own reputations are not to be sullied by the rogue players and they are to attract the right sort of content creators.

Social media needs to avoid becoming an anti-social menace in the financial world and a partnership with the financial regulators is the way to do it.

Kevin O’Donnell is editor of Financial Planning Today and a journalist with 40 years of experience in finance, business and mainstream news. This topical comment on the Financial Planning news appears most weeks, usually on Fridays but occasionally other days.  Email: This email address is being protected from spambots. You need JavaScript enabled to view it. Follow @FPT_Kevin 

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