Financial Conduct Authority Social Media Guidelines

As part of the FCA’s financial mis-selling clean-up act, a special report has been published to address the use of social media for financial promotions. Have your say and submit your opinion by November 6^th…

As any forward thinking business will know, it is imperative to have the right social media strategy in place in order to “spread the word” and engage with your target audience.

On 6^th August, the Financial Conduct Authority (FCA) published a Guidance Consultation that intends to determine the role that social media will play in firms’ management of their financial promotions.

In the words of the FCA, this Guidance is meant to:

• “Clarify and confirm our approach to the supervision of financial promotions (as defined in the legislation) in social media
• Help firms understand how they can use these media and comply with our rules
• Remind firms that our rules are intended to be media-neutral to ensure that consumers are presented with certain minimum information, in a fair and balanced way, at the outset of firms’ interaction with them
• Set out specific areas that firms need to consider, and provide some solutions and illustrative examples”

 

Positive approach to social media financial promotions

Interestingly, the FCA do not want to be seen as taking a preventative approach to firms using social media to promote their financial products. They are, however, aware that all types of financial promotion communications must be clear and not misleading.

FCA compliance will certainly be extended to all forms of social media so – regardless of the allowed character length of the update – businesses must remain compliant.

FCA social media advertising compliance

One of the past problems that the FCA are working very hard to stamp-out was misleading advertising; widespread use of the internet has always made this difficult to regulate.

As gaining an FCA licence for an automotive trader is very stringent, it is most likely that a lot of the rogue traders – who may have relied on mis-selling – will become a thing of the past.

However, the FCA’s clean-up operation has allowed them to look at the use of social media - as well as conventional and online advertising - to ensure that this method of financial selling is also properly regulated.

Digital and, in particular, social media, in many cases, have become very important for firms to spread the word to potential customers and forward-thinking automotive companies take portals like Twitter and Facebook very seriously.

Whilst the FCA state that they do see “positive benefits” for using social media for financial promotions, they are keen to ensure that all posts and updates remain compliant, and crucially, not at all misleading. 

Read the FCA GC14/6 Social media and customer communications report and have your say

A number of social media platforms, however, have character limitations which can constrain their use.

With this being just one of the problems that needs to be addressed, firms are invited to comment on their initial consultation before its submission on November 6^th 2014 – click here to read the full report and submit your comments if you would like to be heard.

I believe that all online advertising should be clear and definite, no matter what platform it appears on. As such, all attempts by the FCA to put specific social medi

a update guidelines in place will be certainly welcomed by me.

Let me know what you think – I am very active on Twitter both on my own account @SamwaysCarTalk and also my leasing company @NevaCambridge.