When was the last time you checked your Twitter, Facebook or Instagram account? Or had a quick look to see what your favourite celebrity is getting up to?
67% of the UK population are active social media users (according to statista.com), which has also given rise to a culture of product endorsement. Celebrities and influencers have quickly realised the power and value of recommending a product to their followers. When a person idolises a celebrity who then posts a picture or video of themselves on social media saying how much they enjoy using a certain brand of make-up, or drinking a certain champagne … well you don’t need to be a marketing genius to realise the potential effect that may have on sales.
The difficulty with all this came when users realised that some of the celebrities they followed were being paid for endorsing products without disclosing that in their posts. In early 2019 Britain’s competition watchdog, the Competition and Markets Authority, said it had secured formal agreements, led by a number of high profile social media celebrities including Rita Ora, Millie Mackintosh and Ellie Goulding to agree to state clearly in their posts if they had been paid or received any gifts related to the products they endorsed. As a result, these and many other celebrities all now add hashtags such as #ad, #spon (sponsored), #paid to show that the content creator has been paid by a company to advertise the product or service. There is even a guide for influencers on the gov.uk website, explaining how to be up-front and honest about what you are promoting.
But of course in the wild world of social media, there will always be people who try to flout the guidelines. A few weeks ago The Times reported on the case of three Instagram influencers (two former cast members of The Only Way is Essex, and one former Love Island contestant), who were filmed by the BBC agreeing to be paid to promote a drink, without realising that one of the drink’s ingredients was hydrogen cyanide, an extremely poisonous liquid.
There have also been warnings from the Financial Conduct Authority (the FCA), who have spotted a number of ‘get rich quick’ posts from social media influencers who appear to be endorsing high-risk investment schemes from unregulated companies. These posts, which often show young people posing with sports cars and luxury goods, are clearly targeted at those wanting a similar lifestyle. However, the FCA is now making a concerted effort to crack down on this type of activity which it says is “carrying out regulated activities which require authorisation”. In other words, these companies do not have the necessary accreditation or qualifications to offer these services.
“When it comes to managing your savings and achieving your financial objectives it is vital that you speak to an independent and regulated financial planner,” says Neil Hewitt of Scrutton Bland. “Working with an experienced professional financial adviser means they look at the whole of the market to find the right savings or investment product for you. They will take the time to get to know you and help you put in place a financial planning strategy to help you meet your wealth management objectives.”