Use of social media is coming under scrutiny by the FCA, with a guidance document (Social Media and Customer Communications) currently open for comment until 6 November 2014.
Intelliflo surveyed 117 advisers about their firms’ social media use. The survey found that three in five (58%) are actively using social media, with LinkedIn (48%) the most popular site, followed by Twitter (41%) then Facebook (32%). Many use a mix of all three.
Of those who use social media, almost one in three (30%) believe it has a measurable or positive effect on their business. Slightly more than a third (36%) of respondents find it hard to know its effect on business, with around one in six (16%) believing it has no positive benefit.
When asked to list the reasons why their company gets involved with social media, the top answers were to attract new clients (55%), to be seen to be keeping up with modern communications systems (45%), to keep up to date with financial news and events (39%), to help with website search engine optimisation (SEO) (39%), to communicate with existing clients (38%), to see what our competitors are doing (9%)
Asked about governance, the survey found that just a quarter (25%) had written policies in place that all employees must follow. Slightly less than a quarter (23%) openly admitted they didn’t while the rest (52%) didn’t know, indicating that either policies don’t exist or communication about their existence requires work.
Jo Gilbey, Intelliflo’s Marketing Director, says:
“Our survey provides a snapshot of how advisers are managing their marketing through social media platforms. With the FCA working to deliver firm guidance on how it expects advisers to operate in this space, it’s increasingly important for the industry to ensure it has adequate controls and governance in place.”
Aside from the proposed FCA rules on product promotions and endorsements through social media, which are a major part of the consultation document, there are two other key points that Intelliflo believes advisers should be focusing on now. The first is sign-off of social media posts and tweets. The FCA guidance document states that sign off of all digital media communications must be carried out ‘by a person of appropriate competence and seniority within the organisation’.
The second is about keeping adequate records. To comply with the FCA guidance, relying on social media platforms’ time-lines is not enough. This means firms should be using separate tools that will log and maintain all social media activity across all platforms.
Jo Gilbey continues:
“Social media can be a cost-effective tool in the marketing mix but it in a heavily regulated industry it needs to be used with care and caution. Leaving it to a junior member of the team can be tempting but it’s clearly something the FCA doesn’t want to see.”
