More and more financial firms are using social media to communicate information and promote products. Which means it is increasing important to focus on compliance.
Blogs, micro-blogs (Twitter), social and professional networks (LinkedIn, Google+, Facebook), forums, and image and video sharing platforms (YouTube, Vine, Pinterest) put firms directly in touch with consumers, giving them obvious appeal and value.
Tips to stay compliant when using social media:
- Promotions must be clear, fair and not misleading - bearing in mind character limitations, consider whether social media is the best form for communicating your promotion.
- Use software where possible to precisely target selected groups - promotions can shared or retweeted quickly on social media and can easily end up in front of a non-intended recipient. But, software can help you manage this risk.
- Include the risks as well as the benefits when promoting financial products and services - give sufficient information to enable customers to appreciate the benefits and also be aware of relevant risks. This can be tricky to describe complex financial products where space is limited, so always consider linking to more detailed information.
- Make sure the risks are displayed prominently and get equal billing - check each individual financial promotion (including tweets, photos, banners, Facebook pages and inserts) to ensure risks are displayed prominently, in the same font size as the promotion.
- Insert images (e.g. infographics) into tweets - to enable more information to be conveyed in restricted formats. But, note that this functionality can be turned off so you must avoid placing risk warnings or other regulatory information in such links.
- Social media is unsolicited communication - most promotions on social media are unsolicited real-time financial promotions and, as such, the rules on 'cold calling' apply. Being one of your firm's 'followers' on social media or 'liking' your firm's page on Facebook does not constitute 'an established existing client relationship' or an 'expressed request'.
- Have all financial promotions signed off before release - by someone with the appropriate competence and seniority.
- Consider whether brand or image advertising may be a better way of promoting your firm instead - i.e. with your firm's name, a logo, an image, contact point, and referral to the regulated activities offered. This will need to comply with the rules for different sectors too - e.g. investments, mortgages, insurance and banking, credit products, etc.
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