TikTok has banned branded content around financial services and products across the world.
In its branded content policy, the social media platform said that all promotion surrounding financial services and products is “prohibited”.
This includes areas such as lending and management of money assets, trading platforms, cryptocurrency, forex trading, investment services, ‘get rich quick’ schemes and pyramid schemes.
The social media giant recently partnered with Citizens Advice to create a series of short videos to help Brits better understand their finances.
‘Missing golden opportunity’
Gina Miller, co-founder of SCM Direct, told International Adviser: “As with so many issues, there needs to be a nuanced approach or there will be unintended consequences. We desperately need to encourage people to be more financially savvy and for more to actively save for their futures.
“Education is key and platforms should aim to increase knowledge and understanding. This is different to selling and I am baffled that platforms have been allowed to host scam ads with impunity whilst making huge profits from them.
“As someone who has passionately been lobbying Oliver Dowden on several aspects of the Online Safety Bill, I am very pleased that the bill is before Parliament this year and not 2024 as they had intended. That said, they are missing golden opportunity to tackle all harmful advertising on social media platforms, from all sectors and industries. This should be covered by the proposed duty of care under the bill.”
One of the London Capital & Finance bondholders told IA: “This is an incredibly welcome and significant development in the fight against scam financial online adverts and represents a paradigm shift in the attitude of social media platforms who have hitherto ignored the issue in favour of revenue.
“TikTok is putting duty of care and education first and foremost as a corporate responsibility.”
Regulated firms caught up
Myron Jobson, personal finance campaigner at Interactive Investor, said: “The change in policy will hopefully mark the end of dubious and outright misleading adverts of high-risk investments as well as highly volatile cryptocurrency on the platform. The hope is that TikTok’s systems are robust enough to detect and weed out content that falls foul of its revised policy.
“The change appears to be a wholesale ban on the promotion of all financial services and products – meaning regulated financial firms could be swept up in it. This would be a real shame, because it would prevent informed and useful financial content from bona fide financial firms and experts from reaching the masses who use the platform.
“Online searches are a great way of getting investment guidance and ideas, but it can be a minefield. The Reddit versus Wall Street saga which saw the price of so-called meme stocks, like GameStop, soar under the influence of Reddit posters, exemplifies the influence social media has on investing behaviour.”
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