The FPSB, the global standards setting body for Certified Financial Planners, has urged regulators to get tougher on social media ‘finfluencers’ who promote financial products or give financial tips, often via YouTube or social media.

The FPSB (the Financial Planning Standards Board), has submitted recommendations to the IOSCO Retail Market Conduct Task Force on how regulators around the world could address the potentially damaging impact of the rise of so-called social media ‘finfluencers’ (financial influencers). 

The FPSB also wants IOSCO (the International Organization of Securities Commissions) to investigate the increase in crypto-based financial products and their lack of regulation.

IOSCO has launched a review of jurisdictions around the world to increase efforts to prevent retail investor harm. IOSCO is a global standards setting organisation for regulators globally and has 233 members including the UK’s FCA.

The FPSB has more than 203,000 Certified Financial Planner members around the world.

IOSCO is consulting on rapid technological change in the retail finance marketplace and an “increasingly complex and changing retail trading landscape.”

The FPSB’s submission to IOSCO provides recommendations on issues including the impact of social media and finfluencers, the need to regulate crypto assets and ensure that all who provide (or who are deemed to provide) financial advice are “appropriately qualified” to do so and held accountable for that advice, including finfluencers.

FPSB head of stakeholder engagement Dante De Gori CFP said: “Financial fraud and scams are certainly not new, but the rapid emergence and evolution of crypto assets and other complex digital assets means the level of risk and exposure for retail investors is becoming heightened. Licensing and product regulation are struggling to keep up with this fast-changing landscape, leaving Financial Planners unsure of their regulatory obligations and leaving retail investors to go it alone, guided by marketing campaigns, often with harmful consequences.” 

“FPSB, the FPSB Network and the global CFP professional community have a role to play in supporting IOSCO members seeking to better protect investors in their territories. FPSB has provided IOSCO with a series of recommendations that we believe will serve retail investors and support IOSCO members efforts to develop regulatory toolkits and other measures to protect retail investors.” 

Among the raft of recommendations the FPSB has called are research to better understand the correlation between the investor’s status – either ‘self-directed’ or ‘advised’  – and the investor’s likelihood to experience “unmanageable / catastrophic financial loss” when investing in complex products.

It also wants to see a banning of the use of credit cards to purchase complex financial products and introducing a register of “qualified finfluencers.”

It also urges IOSCO members to “proactively engage” with social media influencers and reinforce the boundaries in which finfluencers can operate, restricting finfluencers to providing information only if they are not qualified to provide financial advice.