It’s not all about how much you make, but how well you make it serve you, your family and future generations

Financial regulators around the world have become increasingly concerned about the rise of ‘finfluencers’, who use their social media accounts to promote financial products or give financial advice.

The UK Financial Conduct Authority (FCA), Britain’s financial watchdog, announced in June that it had teamed up with regulators from Australia, Canada, Hong Kong, Italy and the United Arab Emirates for a coordinated week of action against the illegal financial promotions.

The FCA has already issued 50 warning alerts, which will result in over 650 take down requests on social media platforms and more than 50 websites operated by unauthorised finfluencers. It has also sent seven cease and desist letters, made three arrests, initiated criminal proceedings against three individuals and invited four finfluencers for interview.

Many finfluencers are not authorised to provide financial advice, and their promotions may not be accurate or safe, potentially leading to financial harm. They are often filmed in a luxurious location, standing next to a supercar, wearing expensive watches and designer clothes, telling their viewers how, if they follow their investment advice, they too can become wealthy and have a similar lifestyle.

Younger people may be particularly vulnerable to finfluencer promotions, with many trusting their advice and changing their financial behaviour based on their recommendations. Recent research by broker Charles Schwab UK, indicates a significant gap between generations and their use of social media (SM) and the internet, as the primary source of information for financial advice and investment management decisions.

Whilst fraudulent investment schemes are certainly not new, technology and access to information has not only increased the desire of people to seek out greater opportunities, at both a personal and business level, but also the amount of inaccurate information and questionable activities that are propagated online.

The latest regulatory actions highlight the need for everyone to take professional advice when planning their financial future. Equally it highlights the need for professional advisers to understand the changing aspirations and needs of their international clients, both today and tomorrow, and to develop their services to meet them.

This involves a multifaceted approach encompassing strategic planning, in-depth knowledge of diverse investment and management strategies, and a commitment to sensitive management for long-term sustainability. The true value of accumulated wealth should not be measured just in terms of quantity, but in its application and effectiveness; its ability to positively benefit the family across generations.

In a world marked by conflict and instability, many individuals, families and businesses are assessing ways to secure their personal and commercial freedoms by exploring alternative residency, tax residency and citizenship options. This allows them to establish new bases of operation or residence in locations that offer greater stability, flexibility and, potentially, access to more favourable tax regimes.

Strategies to considered should include:

1. Residency, Tax Residency and Citizenship Planning – to identify a new country or countries that will provide significant personal, business and lifestyle opportunities, including enhanced security, international mobility, investment opportunities, tax efficiencies, and access to high quality education and healthcare. This also applies to clients who wish to remain in their home country but want to consider securing residence in a second country now, which can be accessed in case of emergencies, or in retirement, or for current use by other family members.
2. Strategic business establishment – to provide greater operating efficiencies through increased market access, risk mitigation, talent acquisition, economies of scale, knowledge transfer, tax efficiency and a competitive edge.
3. International tax planning – the implementation of tax efficient strategies, enabling individuals and companies to efficiently manage their tax liabilities on an international basis.
4. Bespoke Asset Management Structures – to provide increased flexibility and asset protection, as well as the ability to pass wealth down through generations in a controlled and efficient manner.
5. Asset Diversification – to including cash, currencies, bonds, equities, businesses and property, across secure jurisdictions for risk mitigation and tax efficiency, to be accessed by the family or individual members as required and as their personal situation dictates.

The Sovereign Group’s global network of offices, experienced client advisers and professional services partners ensures it is well-placed to assist, advise and support individuals, families, businesses and their advisers to plan, implement and manage their assets, as well as to unlock the potential of benefits of alternative residence or citizenship.

For further information, to discuss your or your clients’ requirements, please contact us at RCBI@sovereigngroup.com