The Financial Services Forum has urged advisers to carry out a ‘Daily Mail’ test with tweets and other types of social media, where they should consider how they would feel if their tweet or blog landed on the front page of the national newspaper.
Following the release of the Financial Conduct Authority’s updated social media guidelines earlier this year, the Financial Services Forum has published a report into how firms can build an effective framework to make the best of this brave new world.
The report noted that the FCA requires staff training so employees understand the difference between appropriate and misleading content, adding that this is especially important when employees use the same social media accounts for both business and personal purposes.
It suggested emphasising common-sense behaviors rather than being too prescriptive, with one discussion group participant calling it ‘the Daily Mail test’: “With every tweet, retweet or reply, blog, comment, endorsement or status update, consider if it landed on the front page of the Daily Mail that day?”
The Financial Services Forum also pointed out that the regulator requires a robust approval process, ensuring that even the most diligent of advisers’ interactions are always checked and signed off, but noted that this is where social media and the normal ‘sign off’ conventions present a conflict of interests.
“The immediacy of social media makes it virtually impossible to have all activity run through a proper compliance check before it gets posted,” read the guide.
The framework is the result of a close collaboration with an industry working group made up of Axa Investment Managers, Baring Asset Management, Impax Asset Mangement, Jupiter Fund Management, Killik and Company, London and Capital and Shawbrook Bank.
Stewart Conway, head of digital marketing at Jupiter, commented: “Social media and other digital communication channels are going to become as ubiquitous as email, and the advisers who ultimately succeed in business will be using these channels to interact with their clients, if they aren’t already.”
Fiona Cornes, corporate affairs and group marketing director at Shawbrook Bank, said it is important that compliance requirements do not inhibit the benefits of using social media to “amplify core messages and develop meaningful relationships with customers”.
Crucially, the FCA also mandates that all financial services firms must keep a record of social media communications, including both content from the adviser and the responses.
While there are no specifics on length of time records should be retained, generally it is good practice to have a three to five-year retention period for communications with clients and potential clients, according to the guide.
“Do not assume that a more institutional focus from a business allows for a more relaxed policy,” stated the guide, adding that whether institutional, intermediary or direct-to-consumer, assume a retail audience will see any activity.
“Do not engage with social media unless there is a system in place, such as a piece of third-party software, to log every single interaction and be able to deliver that on demand. Just as email is logged and archived, organisations should have access to a third party system of audit, independent of the social networks them.”
Research published earlier this month by software provider Intelliflo suggested that while UK advisers are finding social media channels increasingly useful for attracting new clients and keeping up with the competition, the majority are yet to have formal written policies in place for employees.
Earlier this summer, archiving and compliance firm Smarsh questioned more than 100 financial services firms - 16 per cent of whom were advisers - about electronic communications from March to June this year.
It found that half of them did not have archiving solutions in place for mainstream social media channels such as LinkedIn (58 per cent) and Twitter (56 per cent), or for mobile/SMS text messaging (58 per cent).
According to the City watchdog, ‘digital communications’ sign-off should be by a person of appropriate competence and seniority within the organisation, with firms also told that they need to keep adequate records of any “significant communications”.
