“Financial promotions, whether on social media or traditional media, must give customers the right information and meet our requirements to be fair, clear and not misleading,” FCA director of supervision and authorisations, Tracey McDermott.
The FCA has recently released guidance on the appropriate use of social media for financial promotions. The clear and continuously hammered home message from the regulator was that a financial promotion must be ‘fair, clear and not misleading’.
So what exactly does ‘fair, clear and not misleading’ entail when it comes to promoting your financial products on social media?
Financial promotions for certain products or services must come with a risk warning or be made clear that it is a promotion in the message, regardless of character limits. Therefore, tweets, which have a character limit of 140, still need to carry the adequate information to remain compliant. The FCA is aware of the limitations faced by the character restrictions, and has recommended the use of images, which carry the risk warning. However, it is possible that users can turn off images from being permanently visible. In this case, the FCA has said that the tweet still needs to carry the risk warning.
Don’t over emphasise your offering - The FCA made it clear last year that ‘invitation or inducement in financial activity’ is prohibited without a risk warning. For example: “To see our current P2P loans, click here:” is compliant. However, ““To see our great P2P investment opportunities, click here:” is non-compliant. The use of the word ‘great’ introduces an element of inducement that creates a promotion.
Early guidance last year allowed for the use of ‘#ad’ to acknowledge a financial promotion. The FCA has now said, “Hashtags are not an appropriate way to identify promotional content. “ Firstly, paid ads are already bundled with the ‘sponsored’ or ‘promotion’ label, and secondly, ‘#ad’ doesn’t adequately cover the risk warnings needed.
Retweets are your tweets - By retweeting a message that carries a financial promotion it in turn becomes your responsibility and falls into the same requirements as above. Also, tweets or messages on other social networks from employees of the firm carrying a financial promotion, may also be judged as yours!
Sign-off and record-keeping - The FCA reminds firms of their obligations to have an adequate system in place to sign off digital media communications and to keep records of all digital communications. This may be required later on!
The main consideration when promoting on social media is to stay factual. If you keep to the facts and make sure potential customers are aware of any risks, then you cannot go too wrong.
It is important to note that the above is not a full list and we would recommend that anyone affected by the above reads the full guidance documentation on social media promotions before promoting a financial product or service on social media.
If you need help with anything mentioned in this blog post, or want to promote your financial product or service on social media, please get in touch.