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Quick note before beginning this week’s post. FinMark Summit is just over a week away so if you’re planning on joining, please register now.
We’ve got speakers and attendees from Revolut, IG Group, eToro, and more, so it will be a fun day and a good chance to spy on your peers and/or catch up with your friends. There will also be drinks at the venue after the ‘conferencing’ part of the day is finished.
See you then!
Now on to this week’s post.
I don’t know if you have been on Facebook recently but that site has become really weird. The entire feed has descended into a mix of targeted pages and tiktok-style short form video, slopped out to you in an attempt to grab your attention for five seconds. Both are interspersed with ads.
And probably because I have been targeted in some way, my entire ad feed is just stuff from this industry. A few months ago it was all props. Now every single one is some variation on an influencer short form / mobile optimised video ad, saying how you can be rich and/or copy amazing signals, with a link to a landing page.
If you actually follow through to the landing page, you’ll then be pushed to join a Telegram group. From there you are (usually) given free signals and told that you can have them by depositing with broker X.
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It is amazing just how many of these people there are. I went on to the homepage to test this before writing the article. I got to 15 ads in a row that were all different pages with variations of the same process described above, before getting bored and stopping scrolling.
How does it work?
I wish there was some more complicated story or methodology at play here but there isn’t.
These guys clearly just spam Facebook and Instagram with ads, a lot like an e-commerce product. You clip off a certain number of people who click through and then just try to make the transaction as smooth as possible up to depositing.
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You have to admire the fluidity of the process in some instances. I timed one attempt and it was less than three minutes from clicking through to being told how and where to deposit.
The more interesting point is how these are structured.
Most pages are clearly churned through. For example, I saved 10 pages and, of those, seven had been made in the last two months. Another had been made in December of last year. The oldest page was from August 2023.
The advertisers list themselves as various things, like educational services, personal coaches, ‘consultants’, or – in one instance – a band (lol).
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This stuff is designed to bypass restrictions on financial ads. It’s also why the pages are churned through so quickly. Once Meta realises that the page is advertising a financial service, they’ll shut it down. So then the advertiser just starts again and opens a new page.
For instance, one ‘signal’ provider uses this guy as its advertiser…
…wouldn’t you trust him?
Anyway, he is active across at least three different pages at the moment – there could be more – presumably to reduce the risk that one gets banned.
However, what’s also very interesting about these sorts of pages is that a lot of the time the influencer person that is the face of it appears to just be a puppet or actor, working as a front for some marketers behind the scenes.
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For instance, the guy in the picture above, who looks like he’s on his way to take his GCSEs, is clearly from the UK. But the page admins are in the Netherlands.
In fact, that is a very common feature among these ‘influencer’ pages. You have someone as a front appearing in the ads who is from the US, for example, but the page admin – who is running the ads – is in the Netherlands. Who knows? Maybe there is some guy in Amsterdam, who has figured out how to make this work for him and just hires people to work as the face of the ads.
Another alternative theory put forward is that brokers themselves are paying for these guys to be like actors / puppets for video content, which one of their partners then manages. That is entirely plausible but somehow I doubt anyone’s going to confirm if it’s true or not.
Who is doing this?
The question you may also have is who is actually working with these guys. Well, last year I met an executive at one of the firms that has proven popular with them.
Let’s just say I gave him a stern talking to. He apologised and said he was also thinking of getting out of the industry to start working as an astronaut. I said he should try being a wasteman instead.
However, the company that has come up more than any other is IronFX.
What’s particularly great about this is that there is currently an ex-Love Island guy called Jonny Mitchell who is partnered with them. Meanwhile a bunch of other ex-Love Island people in court for doing the exact same thing five years ago! Why change a winning formula, I guess?
The obvious upside for brokers is that they have plausible deniability and any potential fallout will come down on the influencer.
However, to me this stuff is really a great example of where the regulator in the UK has failed. All of these people were using marketing tactics like this prior to 2018. Now it’s post-2018 and they are still doing exactly the same thing.
Meanwhile, companies that were not doing this kind of marketing activity have been hit super hard and are being pushed offshore. So the kind of marketing that the regulator hated most hasn’t changed and instead they just hit the people that weren’t doing it in the first place!
“The ESMA experiment has been a complete failure,” said an executive at one broker to me last week. “[Less scrupulous firms] are getting traffic from traders looking for higher leverage which puts them at a much bigger risk, because legit brokers have either had to stop onboarding them or are trying to find ways to drive them offshore.”
Yup.
