The number of “finfluencers” (financial influencers) on social media has increased in recent years due to the surge in online DIY investing.
Last month, the Financial Conduct Authority interviewed 20 finfluencers who had been warned for illegally promoting financial services products. 
The FCA also revealed that it had issued 38 warnings against social media accounts run by finfluencers that may contain illegal promotions.
This comes after regulators charged nine people in May, including a former reality TV star, in connection with an unauthorized foreign exchange trading scheme promoted on social media.
This qualification is meant to give confidence to both brokers and customers.
Consulting with a professional advisor
These finfluencers are not licensed by the FCA and are not qualified to give financial advice to their followers, who are mainly young people. More and more young people are becoming victims of fraud, and financial institutions are often a contributing factor.
Almost two-thirds (62%) of 18-29 year olds follow social media influencers. The FCA's research found that 74% of them said they trusted advice, and 90% had been advised to change their financial behavior.
Nick Jones, director of mortgage servicing and marketing at Access Financial Services, suggests that finfluencers fall into one of two camps. This means someone whose social media content is considered 'responsible' by the FCA and whose informed and educated advice can be an asset to the borrower. Unregulated individuals who can cause significant harm.
Mr Jones said: “We are pleased to say that the FCA has shown significant interest in this matter since 2023, asking, among other things, major social media platforms to remove harmful content.”
Industry standards help provide consistency and qualification providers can ensure that materials are responsive to market changes.
Like many trusted advisors, Jones tells Access FS, “mortgage advisors are in the first camp, using social media such as LinkedIn to share their thoughts and experiences with colleagues, clients, and prospects.” More and more people are sharing it.”
While it's easier than ever for individuals to have a platform and potentially reach a larger audience, John Phillips, CEO of Just Mortgage and Spicerhart, said the industry is “We need to come together to educate consumers that these finfluencers are not qualified and, in some cases, unqualified.” Are committing illegal acts. ”
Phillips explains: “This is a real problem for the financial services market as a whole and requires regulation as it will result in many customers being given incorrect advice.As experienced and qualified brokers, we are fully qualified to You will need to demonstrate your knowledge and the value you can provide as a fully licensed Mortgage and Protection Advisor.”
Wayne Dewsbury, a mortgage advisor at Moneyman UK, also emphasizes “trust and reliability'' as two keywords related to brokers, but says that the pool of talented people coming from major banks and building societies is “It has decreased significantly,” he added. Increasingly, it is left to brokerages to “develop their own advisors with all the necessary support, resources and costs,” he said.
Knowledge is gained when you work on cases and learn on the job. It's a journey that continues
To become a mortgage advisor, you must obtain a qualification in mortgage advice. The current CeMap requirement is a Level 3 qualification, divided into three modules incorporating seven compulsory units.
Module 1 covers general UK financial regulation, Module 2 is mortgage specific and Module 3 assesses how knowledge is put to work to provide sound mortgage advice. .
Classroom training courses or home study are available. There is also a Level 4 CeMap Diploma which delves further into financial markets and the home buying process.
However, Rachel Lummis, mortgage advisor at Xpress Mortgages, emphasizes: “Just because you pass CeMap doesn’t mean you can become a mortgage advisor.
“It's not something you learn overnight. Exams are just the beginning. Knowledge comes as you work on cases and learn on the job. New products, borrowing methods, and having to keep up with constant change, etc. , this is also an ongoing journey.”
With the rise of social media, do CeMap processes and qualifications need to be updated to reflect how technology is changing the world?
The industry needs to come together to educate consumers that these finfluencers are unqualified and, in some cases, engaged in illegal activity.
Dewsbury says that since the 1990s, “exam access has become much more flexible and people no longer have to wait three months to take their next exam.”
He added: “We are confident that as long as our content remains updated and relevant, we will continue to maintain our value as a recognized qualification.”
David Hollingworth, associate director of public relations at L&C Mortgages, agrees that CeMap qualifications require regular review to ensure they are appropriate.
Mr Hollingworth said: “Industry standards help maintain consistency and allow qualification providers to ensure materials are responsive to market changes.
“This should help brokers recruit people who have reached a recognized level and train new advisors to meet that standard.
“However, qualification renewal is not something that should be ignored and qualification providers will definitely continue to consider it.
The FCA has shown significant interest in this since 2023, asking major social media platforms, among other things, to remove harmful content.
“While market trends can change, the principles often don't change that much. But ultimately, this qualification is designed to give brokers and customers confidence that they are dealing with a professional advisor. There is.”
While we have no objection to a review of CeMap qualifications to ensure they are as up-to-date as possible, the industry and the FCA need to ensure that young people and the wider public do not fall victim to the advice of unauthorized finfluencers. You can play a role in making sure that you do so. scam.
For more information on the need for financial education, check out Broker Focus – Michelle Lawson.
This article was published in the November 2024 issue of Mortgage Strategy.
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