Slow off the mark?
The FCA has published new guidance aimed at clarifying its approach to the supervision of financial promotions in social media.
Clive Adamson, Director of Supervision at the FCA, believes the guidance is “a sensible approach that doesn’t affect industry’s ability to innovate using new forms of media” (http://www.fca.org.uk/news/fca-sets-out-its-approach-to-financial-promotions-in-social-media).
Not true, argues Sharon Flaherty of BrandContent, a social media and content marketing consultancy. Writing for
FT Adviser, Flaherty criticises the FCA for being far too slow off the mark.
“In the time it has taken to update its social media guidelines, Instagram, Vine, Snapchat, and a whole host of other social networks have been born,” she says, pointing out that the number of social media users has “almost doubled to 1.82bn since the regulator first published its social media guidance in June 2010”.
Flaherty adds that the “wait … has prevented many professional advisers and regulated firms from taking advantage of the opportunity social media presents”.
She does credit the FCA for having “tried to be more prescriptive in its guidance, and give clear examples of compliant and non-compliant social media posts”.
However, in striving to protect the customer, the regulator has gone “too far in attaching unrealistic compliance restrictions on social media, while completely ignoring social media best practice”.
FT Adviser article Narrow focus
Investis, a global digital corporate communications company, feels the FCA guidance is too vague in guiding firms on how to handle social media.
“Marketers were hoping for more detail … on what it [the FCA] considers is and isn’t good social media practice in the sector … but it looks like there will be no social media hand-holding from the regulator, at least not this time around.”
Investis notes the concerns that the regulator is in danger of ignoring legal, reputational and operational risks associated with social media if it remains focused only on financial promotions.
“[The] current guidelines do not go far enough to encourage corporate companies to embrace the medium without fear of falling foul of regulations.”
Investis blog Inspiration from America
Datamonitor’s Heike van den Hoevel advises the regulator to look to FINRA, the largest independent securities regulator in the US, for inspiration.
Van den Hoevel, who is Analyst, Private Wealth Management at the market intelligence company, says: “FINRA’s members’ use of social media is significantly more stringent than in the UK; however, a significantly greater proportion of US wealth managers (54%) use social media to reach out to clients.”
She advises firms to offer an internal code of conduct that provides relationship managers with guidelines and stipulates appropriate behavior.
Datamonitor opinion piece Handy tips
Although Emma Muckersie of social media consultancy Freshminds regards much of the guidance as “fairly self-explanatory”, she believes the FCA does offer “a number of handy tips to help firms harness social media, whilst ensuring their behaviour is compliant”.
“In many ways, the way the guidance was delivered was more interesting than the content itself. The FCA tweeted key points from its Twitter account and used Storify to compile a summary of the report – an effective means of ensuring the content was both digestible and easily sharable.”
Unlike many other commentators, Muckersie believes the guidance does help firms “understand what a compliant promotion looks like”.
“This has been a grey area for too long. The FCA could go further, but by sharing pictures of what good looks like, it has taken a valuable step forward.”
Freshminds blog
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