No sooner had the FCA released detailed guidance on the use of financial promotions with online marketing, specifically social media, so more questions are asked of them.
Follow my simple rules and you won’t need to wait for more clarification or ever get into trouble.
I have set out two simple rules to make sure you never have to worry about the FCA financial promotion guidelines in your social media.
I once asked my economics professor on my MBA course about that old saying from a former US president that went something like this “If you ask three economists a question you will get five different answers.”
My professor’s response was as you might expect from an economist, long.
To spare you the waffle it came down to this. There is no perfect data set, so economists add their own assumption, which in turn leads to more uncertainty. As more data becomes available they add more assumption. And the bottom line is no single economist will ever make the same assumption or interpretation.
Fortunately, we have only one regulator to be concerned with for financial promotions, the FCA. Their regulation works in much the same way as the economist’s data.
The more guidance the FCA produces, the more questions it raises. And so the more the FCA has to clarify what they mean.
For example, the FCA had to clarify in their most recent guidelines that each stand alone piece of digital content must be compliant in its own right by saying “In our view, a tweet and a website will be separate financial promotions, as defined in the Financial Services and Markets Act. On that basis, each must comply separately with any specific requirements in our rules, as well as being clear, fair and not misleading.”
This was in response to a number of questions raised in the FCA social media guidance consultation issued in August 2014 (8 months after they said they would be issued BTW). In particular, responses asked for tweets and posts be viewed as an initial part of the promotion, not in isolation. They should instead be viewed as the start of the conversation.
For the record, I have sympathy for this position. Anyone that knows only a little about online marketing understands that a planned social media post is only of value if it leads to further action, mainly and not exclusively, a click through.
However, the question arose because in the consultation, the FCA that producers of financial promotions need to ensure that consumers are presented with certain minimum information, in a fair and balanced way, at the outset of firms’ interaction with them.
And this all stems from their very first guidance on financial promotions in social media in June 2010, around 7 months after I had been working with social media for one of the UK’s largest fund managers.
This simply means: that if you are producing financial promotions in new media (social media, web etc.) you must ensure that it is compliant with all the relevant rules and you have the systems and controls in place to deliver this.
So here is take away number one for compliance officers, marketers, advisers, the commercial team in car dealerships and mortgage brokers.
Everything you and your firm posts online, especially in social media, is subject to the FCA financial promotion rules – if it is a financial promotion.
That’s what the FCA said in 2010 and what they have also enshrined in their guidance in 2015.
So if you’re posting content other than financial promotions, you’re not subject to the financial promotion rules. The guidance is specific to the content you post.
Now let’s look at the next take away that also aligns itself perfectly to the FCA’s guidance.
The oldest adage in marketing is go to where your clients are. We can see evidence of this in every high street; see how businesses of a similar nature cluster. Especially Estate Agents for some reason. And out of town too. Car Retailers cluster together too. Why, because it makes economic sense. If your clients are going there to see products like yours, then be there too.
The same principle applies to social media, if your clients have a Facebook account (and according to Ofcom over two-thirds of us in the UK do), then you should at least have a page that you can ask your clients to Like.
According to very bright Facebook employee, we login to Facebook for 25 minutes every day. Not all in one go, in fact about 14 times a day. Of course, these are averages and some of us will login more often for longer and some of us less. But that’s the average.
It shows that Facebook is a pretty compelling habit that must deliver some value for many people. Twitter, LinkedIn, YouTube etc. are the same. All adding value to our lives in some way for micro moments from the moment we wake up until the time we go to bed.
Why, because the content we are seeking, liking or commenting on is from people we know or have chosen to follow. It is not spam. We value what we read because it interests us. Not everything I grant you, but we all know how easy is it to skip past that.
So here is take away number two for compliance officers, marketers, advisers, the commercial team in car dealerships and mortgage brokers.
No one wants to see your financial promotions in social media. I’m not following you or your firm to be sold to. Not even messages like some of these:
- If you are looking for a pension in Leicester, call us.
- If you’re worrying about affording your new car, call us.
- We have been providing mortgages to Hampshire for 20 years.
When I’m looking for any of those services I’ll Google them. In fact, over a third of financial decisions start with Google.
Posting financial promotions in social media won’t impact this. Having active content production and social media engagement approach will.
Create interesting web content like blogs and videos that can educate and inform me. Don’t just post monthly market commentary you’ve subscribed to. Post content that shows me how informed you are and share it with me through social media. And that has nothing to do with financial promotion.
The Bottom Line: Don’t post financial promotions in social media.
You’ll avoid all the regulations and it doesn’t work anyway.