As social media has evolved, so have its influences. No longer do customers rely solely upon company literature, published product reviews and direct word-of mouth recommendations.
Instead they are immersed in a world where products and services are openly and widely discussed online; making social media a potentially powerful influence in any purchase decision or relationship a customer has with an organisation.
The FCA defines a financial promotion as “a communication that is an invitation or an inducement to engage in a financial activity”.
Social media can be a great way to connect with clients in a fun, entertaining and social way. However, as the FCA states, it’s important to remember that even light-hearted content needs to be compliant. Full details can be found in FG15/4: Social media and customer communications finalised guidance.
Using social media
Social media networks should be seen as an opportunity to engage with clients, reach new audiences and add value to your services, rather than to advertise and promote products.
Unlike with personal social media accounts, it’s important to ensure that anybody communicating on behalf of your firm does so in a professional, formal and generic manner – and in accordance with the rules and regulations created by the FCA.
Remember, as the owner of the account, you are responsible for regulating the content you post and ensuring that is compliant in the FCA’s eyes.
What you need to know
There are various different ways in which information can be shared across social media and networking sites.
The FCA highlights that the content of communications needs to meet its rules, irrespective of the method of delivery. All in all, what matters is what you’re saying, not the medium through which you communicate it.
As a financial adviser you need to avoid:
- misleading headlines or claims
- unrealistic impressions of a product
- hiding the risks of products
- anything that might give a consumer an unrealistic expectation of a product.
In short, all communications must be clear, fair and not misleading.
