Today, the Financial Conduct Authority (FCA) released a guidance consultation for financial promotions through social media (“Social media and customer communications”). At the end of July, we issued a note to help firms decide whether their communications fell under the regulated, or non-regulated, umbrella. This FCA guidance relates to those communications that are deemed to be regulated.
We look at the FCA’s release today, and what you should now consider in your social media policy. It is important to note that the FCA is still consulting on this and welcoming submissions until November 2014.
Note: This is our interpretation of the guidance and we welcome your thoughts, particularly if you have an differing opinion to our own.
Overall, the FCA welcomes the use of social media by financial services companies provided that any communications remain “fair, clear and not misleading”. They do this on the basis that effective use of social media will help companies to reach a “wider audience” (specifically mentioning ‘younger age-groups’), promote “two-way communication”, as well as to “enhance competition”.
The FCA considers social media posts, such as tweets, as non-real time promotions, as there is a public historical record of what is said. As such, a person liking or following the firm does not constitute “an established existing client relationship” for follow-up with real-time promotional activity, such as cold calls.
“Firms should also keep adequate records of any significant communications”. The FCA states that this should be separate from retaining posts on social platforms and networks as some sites “refresh content from time to time, with the consequent deletion of older material”. Companies should consider with care how they will record their social communications in order to remain compliant.
Any clarification on this important issue is to be welcomed. However, we are concerned that some of the suggested measures – such as including full risk warnings in body text and making companies responsible for the content of retweets – would negate the usefulness of Twitter in particular. We understand that this issue is under consultation and we will follow its progress carefully.
The guidance consultation document is inviting responses on a number of issues until the 6 November 2014. The relevant FCA page on the website can be found here. You should always seek the advice of your compliance officer to ensure that your social media communications are compliant.
For further advice on how you can use social media in financial services to increase engagement, manage reputations and communicate more effectively, please contact either:
+44 (0)20 7382 4753
Head of Professional & Financial Services
+44 (0)20 7382 4762