In the early part of August we read with some interest the FCA consultation paper on Social Media.
In light of this we made a freedom of information request as to the level of engagement it undertook - it claimed the paper was the result of “extensive industry engagement” - as all did not seem right in the FCA’s sourcing of input and reference sources to write the paper.
After reading the FCA’s reply, we can only come to the conclusion that the words ‘fair, clear and not misleading’ could not be used for the FCA press communication.
The answers clearly set out that the contents of this paper were actually developed by the regulator itself, indeed there appears to have been a noticeable absence of deep and penetrative research and discussion with those impacted.
If only the regulator would meet the standards it sets for others in its rules.
Instead it now puts out a document that the industry has to go back to basics on because the regulator has not done the appropriate research and development - this all wastes time, money and energy.
In light of this non-FOI clarification, we have a new definition of the phrase ‘extensive industry engagement’ based on the FCA’s response to our questions. In effect, it now means that attending a handful of conferences and not much else.
It beggars belief that you could formulate an entire consultation paper based on just this - and at what cost?
But perhaps what should really worry the entire industry is what other consultation papers have been formulated in this way…the RDR perhaps?
Below are the letters we sent to the FCA and their reply, so that you can form your own conclusions.
Panacea Adviser letter
Dear Sir/ Madam,
You have just launched a consultation paper on social media use. It is called Social Media and Customer Communications
In paragraph one of the document it is stated that:
“Our overall approach is that financial promotions, whether on social media or traditional media, should be fair, clear and not misleading. We have had extensive industry engagement on this issue and we believe our guidance is a sensible approach that doesn’t affect industry’s ability to innovate using new forms of media”.
Can you please quantify what you mean by this statement by confirming:
• Who exactly have the FCA had “extensive industry engagement” with?
• What is their level of Social Media knowledge and expertise?
• What is the FCA’s understanding of how an adviser would use Social Media based upon to produce this proposed guidance?
• Were adviser firms engaged in Social Media activity consulted prior to the publication of this document and if so which firms?