What regulation should advisers be aware of?

Some companies have adopted social media policies which they expect all employees to adhere to. These might be quite strict but at the least should act as useful guidelines.

Those that haven’t may be leaving employees high and dry when it comes to engaging with social media appropriately, even if they do appear to give their employees some freedom online.

According to Intelliflo’s 2018 social media survey, this year 58 per cent of adviser firms have formal written policies for using social media that all employees must follow, up from 48 per cent in 2017 and only 25 per cent back in 2014. 

Intelliflo states: “Knowledge of the controls in place within firms is much improved, with just 11 per cent saying they don’t know if policies are in place in 2018, compared to 52 per cent when the survey started in 2014.”

Nick Eatock, Intelliflo’s executive chairman notes: “It’s good to see that governance is increasing for social media usage and it appears advisers are gaining confidence about using social media platforms to engage with existing and potential clients.”

Compliance departments at networks and larger companies can effectively make the use of social media a complete non-starter.Scott Gallacher

While many compliance departments at firms have been proactive in this space, some believe they are a little too enthusiastic when it comes to policing social media use.

Scott Gallacher, a chartered financial planner at Rowley Turton, acknowledges: “The advisers that use social media tend to think that compliance is too cautious on the use of social media.

“Compliance departments at networks and larger companies can effectively make the use of social media a complete non-starter. This is primarily because they are, understandably, a little cautious.

“But provided your compliance department approves your use of social media and you exercise a degree of common sense you should be fine.”

Regulatory worries

But the introduction of the General Data Protection Regulation (GDPR) on 25 May this year has fuelled further nervousness among advisers that they may not be complying when using social platforms.

A survey of 100 financial advisers by equity release lender more2life reveals although nearly 80 per cent of advisers have at least one social media account, only 38 per cent use these channels to promote their advisory services.

The findings confirm regulatory worries are at the heart of this, with 42 per cent admitting these were the main cause for concern. 

Stuart Wilson, channel marketing director at more2life, explains: “Our recent survey clearly shows there is an appetite for greater use of the social media among advisers, but more knowledge on how to utilise it successfully and greater clarity on how to do so while remaining compliant with regulation is needed.” 

He points out: “The FCA has previously indicated its support of advisers using social media to interact with consumers, so it’s vital for the industry to tackle these issues, before they become major barriers to future development and progress in the sector.” 

So how can advisers overcome this fear?

For Roger Edwards, marketing director at Protection Review, the answer is simple: “Many financial services companies fear social media because they think they’ll fall foul of regulation, particularly around financial promotions. 

“This fear often arises from the mistaken belief that social media is simply another promotional channel like advertising.”

But he reasons: “Once you accept that social media is a two-way conversation – an engagement – then the regulation problems go away. 

“I have a simple rule here. ‘Don’t push product, just point to great content’. If you follow that rule then, by definition, you won’t be doing a financial promotion and therefore you won’t be falling foul of regulation.”

Mr Gallacher agrees: “Naturally you need to avoid inadvertently making financial promotions or disclosing client data but this is unlikely to a problem for most financial advisers.

“Perhaps the biggest concern is that any comments you make could be taken out of context or misinterpreted.”

Impact of GDPR

What does GDPR mean exactly for advisers when it comes to interacting on social media?

Mr Wilson explains: “In terms of day-to-day use of social media for posting, tweeting, sharing and ‘liking’ content, GDPR is not a concern – where this changes is if you decide to use the powerful advertising tools of sites like Facebook, Twitter and LinkedIn to connect your own client database to those held by the platform to help drive targeted advertising campaigns – such as Facebook’s ‘Custom Audiences’ tool. 

But he notes that these platforms either already have, or are in the process of developing, tools to help advertisers keep to the right side of the GDPR law. 

“Providing you have appropriate permissions to use your clients’ data for marketing purposes you should be fine, but check the notes provided by the social media platform you want to use to see how they deal with privacy issues and what you need to do before you upload any of your own data to their platform,” he suggests.

“GDPR really affects personal data processing and so your followers don’t really present a breach,” says Stuart Phillips, a director at Aalto Mortgages. 

“If they connect and follow you I don’t see how any personal data is being processed without consent. Asking for email addresses for a mailing list can be made compliant by using double opt-in sign-up processes and most email services handle this eloquently. 

“It’s better to have a small but genuinely interested email list that a huge database where no one engages.”

Whether you’re an adviser already well versed in using social media, or one who has yet to make a mark on these platforms, it is worth familiarising yourself with the FCA’s guidance on this, and any policies put in place by your firm.

eleanor.duncan@ft.com