There still seems to be many social media experts around these days but few have much to say about the financial sector.
There’s a very good reason for this. The financial services industry is a regulatory minefield, and getting social media wrong can cause it to blow up in your face.
As a result this industry has trailed behind other sectors in social media, but that’s changing fast.
On Friday 13th March 2015 (a brave choice of date!), the Financial Conduct Authority (FCA) published their completed guidance for social media activities, eliminating much of the uncertainty that surround regulatory compliance. This updates and supersedes some previous views, and includes some important changes that marketing and compliance teams will need to be aware of.
There is one important part of the previous guidelines that the FCA clarified in much more detail in 2015. Namely “and you have the systems and controls in place to deliver this.” And while this shouldn’t appear to be a major issue for individual advisers, brokers, car dealer commercial teams etc; it has rocked the world of the networks, compliance service providers and internal compliance teams.
Here Are 3 Reasons Why:
1 Need To Archive Social Media Posts
Social media posts are subject to the FCA’s conduct of business rules, specifically requiring you to create a record of the communication.
This functionality is currently performed perfectly adequately by the social media site providers. In fact, Twitter has quite a neat tool for downloading every tweet you have ever sent and it’s quite fun to do.
However, the FCA is concerned that you cannot rely on Facebook at all. You do not have control and the content you posted may be refreshed and lost.
To be honest, this isn’t an entirely bad idea. It will protect you and your firm in the event of a consumer complaint, especially a claim via a no-win, no-fee solicitor sometime in the future.
The sensible approach here is to use a third-party social media software that enables:
You to manage all your social media accounts in one place
- Your compliance team access to review your activity
- A record to be kept of everything you do
- An audit trail of any compliance interventions
2 The Need To Monitor Social Media Activity
Of course all advisers, brokers and anyone selling consumer credit and regulated by the FCA has an obligation to have an adequate system in place financial promotions and other communications signed off.
Digital, especially social media communications is no different to this. So your network or compliance service provider should be able to provide some suitable resource. This should be a person of appropriate competence and seniority to review your social media activity.
The easiest approach is for your compliance team can carry out a simple risk assessment.
We’ve have worked with clients where this is done before every post, after every post, but most are somewhere in between. There is no reason why anyone would need to check your social media activity more than quarterly (and even that’s a lot) if:
- You have been social media without any issue for any reasonable length of time, or
- You use a content provider that can demonstrate robust compliance processes.
3 The Need To Address Personal Social Media
Finally, the FCA have brought social media use by UK financial professionals into line with the US and other UK professions. As soon as you start using your personal social media in the course of business, it needs to be monitored and archived as in the first two points.
In the course of business means that you derive some ‘commercial interest’ from sharing a post or engaging in the dialogue. That’s a pretty broad spectrum of activity.
Remember, FCA’s rules are intended to be media-neutral, meaning any form of communication, including social media can be seen as a financial promotion. The fundamental requirement that all communications are ‘fair, clear and not misleading’ and all the other requirements apply to social media just as they do for any other media.
Social media strategies
Getting social media strategies right can be a great way for any business to engage with its target audience, although firms still need to use social media wisely and ensure that policies and procedures are in place so not breach the regulators requirements.
Key to this is knowing who has overall responsibility for use of social media and that senior management has ownership of the social media strategy.
Employees need to know what they can and can’t do over social media and have a clear understanding the importance of the rules. They also need to be aware of any escalation processes, and who to wake up at silly o’clock in the morning if something goes wrong?
Here are some top tips for getting it right:
Ensure all employees are trained and have a clear understanding of the firm’s social media policy – which should be clear on the boundaries and expectations on using personal social media accounts.
• Check if social media channel is best suited for your message
• Have a clear understanding on the FCA’s stance on risk warnings and other important information
• Ensure the original message is compliant, before deciding to re-publish. It may constitute a promotion and the firm would be responsible.
• Keep messages fair, clear and take care to ensure they are not misleading – including re-tweets.
• Clearly sign-post community standards. This can guide people on what will and won’t be tolerated on your pages.
• Ensure that you have adequate systems and controls in place to review, approve and supervise financial promotions.
• Don’t rely on digital media channels because they continually refresh content and, consequently, delete older material.
In conclusion, the rules are not rocket science – but you should familiarise yourself with the FCA’s guidelines and regulations before lift-off.
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