Effective Financial Promotions and Social Media Compliance Guidelines
Learn about ensuring compliance in financial promotions and social media to meet the FCA's policies. Understand the differences between real-time and non-real-time promotions, guidelines for creating compliant promotions, and key considerations for fair, clear, and not misleading promotions. Explore the FCA's definition of social media and its impact on financial marketing practices.
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Presentation Transcript
Financial Promotions & Social Media How to ensure compliance CPD 30 minutes
FCAs policy on Financial Promotions The FCA defines a financial promotion as an invitation or inducement to engage in investment activity that is communicated in the course of business .1 Print, online, television and radio adverts Marketing brochures and literature Direct mail Web content Email Marketing Social media Sales aids, such as presentations
Real Time vs Non Real Time Financial Promotions Real Time Financial Promotions is a financial promotion made in the course of a personal visit, telephone conversation or other interactive dialogue . These real-time conversations whether in person, by phone or email cannot be compliance-approved in the same way as published communications. Non Real Time Financial Promotions
Compliant Financial Promotions Fair, clear & not misleading Promoted in a balanced way Provide sufficient information to enable an informed choice Set realistic expectations information on past performance needs to be representative and not overly prominent Treating customers fairly
Fair, clear and not misleading Unclear statements: the FCA is very keen on clarity. Any claims need to be clear and able to be demonstrated. Acronyms and jargon that may not be obvious to the reader should be explained Over-optimistic projections of the product in question: anything that could be deemed misleading in terms of suggested returns will fall foul of the FCA Disclosure wording that is too small: any small print needs to be clearly visible Unsubstantiated claims about a firm being the largest or most successful without appropriate evidence A lack of documented compliance approvals: the process for producing financial promotions can be as important as the finished product. A documented compliance process is essential
FCAs definition of Social Media Social media share the characteristic of being digital and can be defined as websites and applications that enable users to create and share content or participate in social networking (Oxford Dictionaries 2013). The following is a non-exhaustive list: blogs microblogs (Twitter) social networks (Facebook, LinkedIn, Google+) forums image and video-sharing platforms (YouTube, Instagram, Vine, Pinterest)
Social Media Promotions & Risk Warnings Each communication via social media needs to comply with the relevant rules on a standalone basis In character limited platforms such as Twitter extreme caution required to ensure that they don t require a risk warning Avoid using #hashtags as they have the potential to confuse the reader
Clarity on sharing content The FCA believes that sharing & liking content constitutes a financial promotion if the customer s tweet comments on or endorses the benefits of a regulated financial product or service, then sharing or forwarding by the firm will constitute a promotion by the firm . Therefore this has implications for those sharing content posted by others. If some else shares content posted by a firm, the firm remains liable for the compliance of the original post.
Approval and record keeping For all Financial Promotions: Clear audit trail demonstrating that the financial promotion meets the requirement to be fair, clear and not misleading and has been Reviewed Approved Signed off All financial promotions are to be managed by marketing & compliance No promotions are to be undertaken by advisers alone
