The FCA’s paper FG24/1 on financial promotions on social media was released in March
2024. Although the financial promotions rules haven’t changed as such, this paper has
helped to make the rules clearer and more relevant in relation to new and evolving platforms
used.
Since the FG15/4 paper released in 2015, the use of social media, in particular for financial
promotions has moved to a new level and to promote within social media has become the
new norm.
However, due to the complexities of some products, social media may not be the best
platform to use. Yes, from a commercial perspective, a firm will gain the most ‘views’,
however, the FCA has made it clear that all financial promotions need to fully adhere to the
rules.
If, for example, there is limited space and character usage, this cannot be used as an
excuse why the promotion is not compliant, it simply may just not be a suitable platform to
use for the promotion.
One of the main challenges that has been identified within a firms’ financial promotion and in
particular within a social media platform, is the prominence of risk warnings. Each individual
promotion needs to be stand-alone compliant.
The reader should not be expected to click through to another page to be able to view any of
the required information. It all needs to be visible on each individual promotion. As always,
the clear, fair and not misleading rule needs to be considered. For example, required risk
warnings need to be clearly visible – remember lack of space is not an excuse for non-
compliance. Also, when thinking of the aesthetics, the text needs to be clearly visible to the
reader.
Financial Promotions and all client communications also play a part under the Consumer
Duty. As part of a firm’s communications review, the firms target market should be
considered and whether the average client can fully understand the financial promotion.
Under the Consumer Duty, it is imperative that marketing strategies align with firms acting to
deliver good outcomes for their customers. This is also the case if a firm is using a third-
party marketing company. Appropriate due diligence should be completed and evidenced as
the responsibility of the promotion to be compliant lies with the firm.
One of the appealing factors of using social media is its large reach, it is out there for all to
see. However, firms need to be mindful that this also includes the FCA – they can have a
look inside a firm without having to make a phone call or knock on the office door. As with
the growth of social media, the FCAs financial promotions capabilities have also grown. So,
by ensuring that a firms’ financial promotions are compliant many help to keep the regulator
away.
For further queries or guidance on your firms’ financial promotions, please visit
www.bluebellcompliance.co.uk or email info@bluebellcompliance.co.uk.