The FCA has launched a consultation into financial promotions in social media. The paper, titled ‘Social Media and Customer Communications’, has warned firms to be “fair, clear and not misleading” when it comes to financial promotions in social and traditional media.
Clive Adamson, director of supervision at the regulator, said, “The FCA sees positive benefits from using social media but there has to be an element of compliance. Primarily, what firms do on social media must ensure customers are at the heart of their business.”
But not all financial advisers are in agreement that social media should now be regulated.
Steve Danson, chartered financial planner at Lancashire advisers Banks Wealth, said, “Surely advisers are already being regulated via rules on financial promotions? I use Twitter to get out a message. I am not promoting a product or course of action.” He said the main objective of using social media is to encourage people to go to advisers for advice.
But Dean Aitchison, investment manager at Essex-based KMD Private Wealth Management disagrees and said the FCA should be intervening. “It is just another method of communicating with your clients and therefore that makes it the FCA’s business. By taking action now it actually demonstrates the FCA is keeping up with the times.”
He added advisers and firms should be regulated, although he cannot imagine he will ever be tweeting advice. “It is just not how we work, and I would raise questions over any firm that did.”
The FCA said a generally accepted way to distinguish between promotions and options is to add in an hashtag of #ad in online posts.
Paul Dorward, principal at PAD Financial in Sheffield, says he does not see how the FCA could possibly regulate all social media sites, although he believes it should be able to specifically regulate how the firms promote themselves within the sites.
Mr Dorward added, “Promoting through other mediums such as letters, posters and TV adverts are all scrutinised, so why not the likes of Facebook and Twitter?”
charlotte.richards@ft.com
