Finding your balance with social media
By Philip Hurst | 03 April 2018
SUMMARY: Tenet's Philip Hurst (Compliance Helpdesk Officer), shares some tips for getting the most out of social media, whilst remaining within the compliance regulations.
If you've travelled on public transport recently you can't fail to notice how many people are using their smartphones to keep in touch. Social media sites like Facebook, Twitter and Linked In are incredibly popular, especially with the younger generation, and recent research suggests that 90% of millennials actually check their smartphones for updates within fifteen minutes of waking up!
So, for financial advisers there is undoubtedly great potential to use social media to quickly get messages out to large numbers of existing clients or potential customers.
But if financial advisers wish to use social media to promote their businesses, there is a fundamental problem. There isn't much space on a social media post for the usual sort of compliance warnings that you might find on a website, and the Financial Conduct Authority (FCA) insists that all financial promotions must be balanced.
In March 2015, the FCA suggested how social media could be used by firms and clarified its position in final guidance (FG 15/4).
The guidance makes clear that:
- Social media should be treated as an extension of the firm's website activity.
- The usual compliance risk warnings must appear.
- Social media messages must be "clear, fair and not misleading" and there must be balance in how services are promoted.
- A firm cannot repost or retweet a non-compliant message and avoid compliance by blaming the original source!
- A good option might be for a social media post to provide a link to an adviser's full website (where the required warnings can appear.)
A key element for advisers is appreciating the differences between posts that are for 'image and awareness' as opposed to ones which are promotional in nature. 'Image and awareness' posts draw a client's attention to important issues, like changes to Bank of England base rates, local house prices or the level of the stock market. Such posts might help to reinforce the perception that the firm is a local expert in a particular business area and are designed to raise the firm’s profile, as well as give potential customers a flavour of the type of firm behind the posts.
Be careful however, as a post becomes a financial promotion if it includes an invitation or inducement to engage in a financial activity. So, providing a direct invitation to contact the firm, or promoting a specific product or service, creates a financial promotion, which requires compliance wording to be added and a check to see this wording is balanced.
At Tenet, we are unique in supporting our advisers with both types of social media posts, via a clear social media policy that member firms opt into and a wide range of pre-approved promotional posts and adverts across different product themes, designed for Facebook, Twitter and LinkedIn.
We recognise that social media brings huge potential to communicate to a large number of contacts and can be a really powerful tool, but it can also have pitfalls. The Tenet compliance helpdesk can support advisers and ensure they stay on the right side of the compliance fence.
Approached from a position of knowledge, it is a great tool to add to advisers' armoury but a bit like riding a bike, you have to get used to balance and stability before you take the stabilisers off!
By Philip Hurst, Compliance Helpdesk Officer
Philip Hurst is a Compliance Helpdesk Officer at Tenet