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The FSA has published the results of a tracking study which it has been conducting since November last year, following its redesign of the financial promotion rules.

The study looked at the industry’s performance in using high-level principles, instead of detailed rules, to guide its advertising and other promotion. For the FSA, financial promotions include all types of marketing whether major press campaigns, direct offers to clients or more simple promotional literature.

In a similar discussion to the one raised last month, this is a key area where firms now need to take conscious decisions as to how they approach an issue rather than being able to rely on a detailed set of rules. The study looked at three key areas:

• The balance of the promotion; that is the prominence given to down as well as up side of any product and therefore how understandable the promotion would be to the audience at which it was aimed.

• Past performance statements.

• Direct offer advertisements.

The FSA conclusion was that so far, for many firms the move from detail to principle had made little difference.

The typical IFA firm probably carries out little direct advertising in the course of a year, certainly TV spots or roadside billboards are not the normal territory. However how can the principles of sound financial promotion be applied in the more normal IFA organisation?

Probably most firms have some sort of literature, brochure or otherwise describing their offering to clients. One expectation which the FSA set out is that literature should be understandable and accessible to the groups at which it is aimed. Therefore, an easy way to check this is to ask a few existing clients if they would read the brochure through and let you know if it all makes sense to them, if it is clear and indeed if it describes the type of service they in fact have received.

Most clients will probably be happy to help as it is not a huge demand on their time and the feedback they give could be quite revealing. They might perhaps highlight things which have been important to them but which you have not even thought to mention. Equally, if there is something they do not understand it may be a good pointer to your use of industry jargon rather than plain English. Also by definition, if you get a good response from existing clients it is good evidence that the brochure is successfully aimed at the right group. The same route could apply to specific literature for a specific service – say school fees planning, again asking those who have used the product in question.

A number of IFAs also write columns for local or regional papers. Here one way to comply with the principles is to talk to the paper about its distribution and readership. They of course know the demographics of their readers and understanding that will help target articles appropriately.

To take a national example, an article on a topic of interest to Daily Telegraph readers may not be so relevant to someone reading the Daily Mirror. The same principle would apply to an advertisement, in that if it is talking about a particular service, say inheritance tax planning, it is important to understand that the readership are of the right demographic to find that of interest. This of course makes good business sense too since the more closely an article or advert mirrors the readership the higher the likely response rate.

A similar principle would apply for any radio spot, whether it is a phone-in or interview. Again the typical listener to the show will depend upon the station’s demographics – which they will understand thoroughly, and the time of day of the show. Something broadcast during the day will have a very different audience say from a drive-time slot.

Of course more prescriptive rules do remain in areas such as past performance or direct offers of specific products. If sending out literature from a product provider it may be worth talking through with them how they feel it complies with the latest principles based requirements – has it changed for example since the new regime came into force.

In total, the new regime is designed to make it easier to advertise, or promote your firm in the way you wish rather than being hung up on very detailed requirements. If you have not yet considered its effects it may be worth doing so as there may be more freedom and scope available than previously.

Joanne Hindle is a freelance business consultant