How to create compliant financial promotions

Jan 24th '19

The process of creating compliant financial promotion and marketing materials isn’t straightforward. Firms need to balance their sales message (what they want to say) with strict regulatory requirements to disclose key product and company information and not to mislead the customer (what they have to say, what they can say and how to say it). This can be a particular challenge when explaining the complexities of some financial products.


Drawing upon our experience of checking financial promotions, this article provides a high-level summary of the key considerations, common mistakes and practical guidance to help with your communications.


What is a financial promotion?

The Financial Services and Markets Act 2000 (“FSMA”) lays outs the restrictions on financial promotions and the Financial Conduct Authority (FCA) defines these types of communications, which are made “in the course of business” under “Regulated Activities”, as “an invitation or inducement to engage in investment activity”. This covers a range of marketing material used to sell or promote products, for example:


  • Sales leaflets/presentations
  • Printed and digital/online advertisements
  • Website and mobile app content
  • Social media
  • Email marketing
  • Scripts for radio advertisements
  • TV storyboards and video


Firms will need to test the “in the course of business” requirement for each of their communications. Non-business communications, such as social media conversations involving groups and individuals not acting in the course of business, are outside the scope of FSMA. “Image advertising”, as defined by the FCA, can fall outside the scope of FSMA as long as it conforms to the following definition from the FCA Handbook’s Glossary Terms (also a useful reference to FCA terminology):


Image advertising

A communication that consists only of one or more of the following:


(a) the name of the firm;
(b) a logo or other image associated with the firm;
(c) a contact point; and
(d) a reference to the types of regulated activities provided by the firm, or to its fees or commissions.


Checking your financial promotions

When checking financial promotions, it’s important to have knowledge of all applicable rules and regulations (including those that are non-industry specific such as GDPR and data privacy), as well as the FCA’s latest thinking, for example:


  • “Stand-alone” compliance of financial promotions.
  • Prominence of risk warnings.
  • Balance of risks versus benefits.
  • Ease of website navigation.
  • “Fail-safe” requirements to ensure key stages of the buying process are read, understood and accepted by the customer.


The main rules on financial promotions can be found in the relevant FCA Handbook.


In addition, the other questions we also recommend for you to consider are:


  • Does the promotion meet the needs of the identified target group of consumers?
  • Is the information appropriate to the information needs of the consumer?
  • Is it clear, fair and not misleading?
  • Are any implied expectations of performance realistic?
  • Is proper weight given to any risks or potential drawbacks?
  • What consumer testing has been carried out, and what do the results show?
  • Have suitable privacy notices and statements been applied, if capturing personal information?


Checking one’s own financial promotions, especially within a small team, can be a challenge. Compliance departments should involve all relevant expertise and stakeholders during the checking and review process – more eyes the better! You may also want to consider an independent review.


From our experience of reviewing financial promotions, the most common mistakes include:


  • Leading with past performance data – this is not permitted.
  • Not quoting “regulatory statements” verbatim. For example, we have found regular mistakes with using the required statements in Key Features Documents and Key Information Documents.
  • “Financial Conduct Authority” not given in full when required to do so.
  • Language not in clear plain English for the customer to understand.


How can we help you?          

Not everything is black and white when it comes to Financial Promotions, and many of the rules are open to interpretation. If you are unsure how your activities fit within the rules, please contact us.


LS Consultancy are experts in Marketing and Compliance, and work with a range of firms to assist with improving their documents, processes and systems to mitigate any risk.


We provide a cost-effective and timely bespoke copy advice and copy development services to make sure all your advertising and campaigns are compliant, clear and suitable for their purpose.


Our range of innovative solutions can be tailored to suit your unique requirements, no matter whether you’re currently working from home, or are continuing to go into the office. Our services can be deployed individually or combined to form a broader solution to release your energies and focus on your clients.


Contact us today for a chat or send us an email to find out how we can support you in meeting your current and future challenges with confidence.


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