This is my third post on the FCA’s attitude to social media. This time I’m looking at what it calls ‘risk warnings’.
This means your obligation to warn potential investors of the risks involved with investing, thus ensuring that all promotions are clear, fair and not misleading.
So, any message you put on social media must ensure that, according to the FCA:
‘…consumers have an appreciation not only of the potential benefits but also of any relevant risks.’
Risk warnings cannot be in small print, and must not be hidden and/or less obvious than benefits. You also must have a risk warning within each message, so you can’t link to another page or post that contains all the necessary – it must be in the body of the text.
This also applies to Twitter – brevity is no excuse – but the FCA recognises that character limitations cause difficulties. So, it suggests using an image in a tweet to allow for more information, while stressing that the image itself must be compliant. But – as images can be switched off on Twitter, you can’t have a promotion in the tweet. You can merely say something like ‘See our latest promotion below:’
You can also tweet a link to a financial promotion, which can include an element of description, such as ‘To see our current UK equity fund range, go to xxxx’. This type of language is compliant as it is not promotional, it merely invites further investigation. You must avoid any promotional language, such as ‘top performing funds’, or even examples of interest rates.
Image is everything
Just one last point on this:
The FCA is also keen to stress that ‘image advertising’ is exempt from the rules and is a good way to use social media. This means an advert that uses a firm’s logo, or an image associated with the company, together with contact details and a description of what the firm does.
But, again, there can be no inducement – even something as simple as ‘invest with us’.
- Clear and legible risk warnings must be included on all social media posts
- On Twitter, it is acceptable to link to, or use an image for, a promotion as long as the introductory tweet is not promotional
- Image advertising – using a logo or relevant image together with contact details – is exempt from the rules, as long as no promotional language is used
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