Social media is a powerful marketing tool, and influencers are the name of the game. The best influencers on Instagram and TikTok earn millions. Regulated financial institutions and scammers deploy influencers to chase after clients and victims, respectively. Lately, the UK Financial Conduct Authority (FCA) has taken action against Freetrade (www.freetrade.io) and ordered the regulated broker to remove all paid-for sponsored influencer advertisements and posts across all social media platforms, including without limitation Instagram, TikTok, Facebook, and YouTube.
One of the most prominent influences promoting Freetrade and other financial services providers is Timothy Paul, who has more than 430,000 Followers on TikTok. In his short videos, he is promoting financial services around investing, payments, insurance, or tax.
Established in 2016, Freetrade is a UK-based fintech providing commission-free stock trading, regulated by the FCA. The company offers a trading app and works extensively with influencers on TikTok and Instagram to acquire new customers. The FCA takes a critical view of this. In particular, the regulator was concerned about an influencer with over 64,000 followers on TikTok that included information about how she was paying off £38,000 in debt and did pay off £14,000 in 18 weeks. This influencer promoted Freetrade via sponsored TikTok videos.