56% of People Who Follow Social Media Financial Advice Lose Money. Here's What That Means for IFAs.

New research from TSB reveals a stark reality: 56% of adults who acted on financial advice they found on social media lost money. The average loss? £690.46 per person.

These numbers should concern every IFA—not because you're competing with TikTok personalities, but because this environment is shaping how the FCA approaches financial promotions across the board.

The Numbers Behind the Headlines

Let's break down what TSB found:

• 56% of people who followed social media financial advice lost money
• Average loss of £690.46 per person
• Losses concentrated among younger demographics who are most active on social platforms

This isn't a small sample of reckless investors. This is a significant chunk of the population making financial decisions based on content from unregulated sources—and paying for it.

The FCA has noticed. Over the past 18 months, they've issued over 1,600 alerts about potentially illegal financial promotions online. They've taken down thousands of social media posts and banned multiple so-called 'finfluencers' from the industry.

Why This Matters for Regulated Advisers

You might think this is someone else's problem. You're FCA-authorised. You follow the rules. You don't make investment recommendations via Instagram Reels.

But here's the thing: the FCA's response to the finfluencer crisis is tightening scrutiny on all financial promotions, including yours.

When the regulator sees £690 average losses from unregulated advice, they don't respond by only targeting the bad actors. They strengthen the entire framework. That means:

More attention on your social media presence. The FCA's 2024 guidance on financial promotions explicitly covers social media posts by authorised firms. Every LinkedIn post, every tweet, every blog article falls under COBS 4 requirements.

Higher expectations for clarity. The regulator wants to see clear differentiation between regulated advice and general commentary. Your social posts need to make your status and the nature of your content obvious.

Stricter enforcement on 'soft' promotions. That educational post about pension allowances? If it could reasonably lead someone toward a product or service, it's a financial promotion. The FCA isn't accepting 'I was just sharing information' as a defence.

What Actually Constitutes a Financial Promotion?

This is where many IFAs get caught out. Under Section 21 of FSMA, a financial promotion is any communication that invites or induces someone to engage in investment activity.

That definition is broader than most advisers realise:

• A post about the benefits of ISAs? Potentially a promotion.
• Sharing market commentary with your firm's branding? Likely a promotion.
• A testimonial from a satisfied client? Definitely a promotion (and one with specific additional rules).

The test isn't whether you intended to sell something. It's whether a reasonable person could see the content as encouraging them toward a financial product or service.

Practical Steps for Your Social Media

1. Audit your existing content. Go through your last 50 LinkedIn posts. How many could be classified as financial promotions? Do they all meet the fair, clear, and not misleading standard?

2. Build a review process. Before anything goes live, someone with compliance knowledge should review it. For larger firms, this might be your compliance officer. For smaller practices, this might mean using automated checking tools.

3. Include appropriate disclosures. Your authorisation status, risk warnings where relevant, and clear labelling of promotional content. Yes, it makes posts less snappy. No, that's not an excuse to skip it.

4. Document everything. Keep records of what you post, when you post it, and who approved it. If the FCA comes asking questions in 18 months, you need to show your process.

5. Watch the line between education and promotion. You can share genuinely educational content without it being a promotion. But the moment you connect that education to your services—even implicitly—you've crossed into regulated territory.

The Bigger Picture

The TSB research highlights a genuine problem: people are getting financial guidance from unqualified sources and losing money. That's bad for consumers, bad for trust in financial services, and ultimately bad for advisers trying to demonstrate their value.

The FCA's response—cracking down across the board—creates compliance burden for legitimate advisers. That's frustrating but predictable. The regulator has limited tools, and tightening rules for everyone is easier than perfectly targeting bad actors.

Your job is to make sure your practice doesn't get caught in the crossfire. That means treating every piece of public content as a potential financial promotion, building review processes that actually work, and staying current with FCA guidance as it evolves.

The firms that get this right won't just avoid enforcement action. They'll stand out in a market where consumers are increasingly wary of financial advice they find online. Being visibly, demonstrably compliant becomes a competitive advantage.

PostGuard automatically checks your social media posts against FCA financial promotion rules before you publish. Catch problems before the FCA does — start with 3 free checks at postguard.online