Protecting Consumers and Capital Markets in the Age of Social Media: the Case of Finfluencers

Financial influencers and content creators, commonly referred to as ‘Finfluencers’, increasingly provide unpaid or paid finance content on social media. This non-expert financial advice can potentially cause significant financial and non-financial harm, especially for financially illiterate consumers. A Financial Conduct Authority study revealed low financial literacy levels among retail investors. For example, 38 per cent of surveyed investors could not list a single reason for investing in their top three investments, with most investors relying on rules of thumb and gut instinct. The shocking findings of the FCA study partly inspired my article Regulating Finfluencers. My paper investigates the practices and business models of Finfluencers and how EU law, three national jurisdictions (the UK, Luxembourg, and Germany), and five social media platforms govern their activities. The primary aim is to comprehend the activities and regulation of Finfluencers and to critically examine whether the current framework adequately protects consumers.