CorpComms Magazine

Financial services firms must apply the same rigorous controls to their new media advertising as to their traditional communications if they are to evade penalties, warns UK regulatory body the Financial Services Authority (FSA).

The FSA was alerted to a number of financial services companies breaching advertising standards and safeguards. Companies were publishing updates on blogs and Twitter without the requisite disclaimers and warnings. The watchdog maintains that if the networking forums are being treated as conventional promotional tools, they must be fully compliant with industry rules.

The FSA's rule book states that communications or financial promotions should be 'fair, clear and not misleading' and that promotions must 'be identifiable as such'.

The regulator also counsels promoters to consider whether a particular new media tool suits the type of communication being issued. 'For example, Twitter limits the number of characters that can be used, which may be insufficient to provide balanced and sufficient information.'

The FSA acknowledged that these omissions were probably genuine oversights rather than the result of any deliberate attempt to mislead. 'Firms may not have considered these factors to meet the definition of a financial promotion and therefore have not applied the relevant communication rules.'

According to the watchdog's statement, many financial services marketers may have thought their activities on social media forums came under the remit of 'image advertising' (communications issuing limited information, namely the company name, logo, contact details and a brief summary of the firm's regulated activities, fees and commissions), which does not require all the official disclaimers.

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