The FSA’s Clive Gordon, Conduct Risk, gave a speech on financial promotions, but with particular emphasis on ‘digital media’ – which would encompass social networking websites, forums, blogs, Twitter and smart phone applications.
The basic message was that the financial promotion rules are media-neutral i.e. the rules focus on the content and as such they will apply regardless of the medium used to communicate the content (see also PERG 8.30). Promotions should be standalone compliant so, for instance, it is not acceptable to omit important information or a risk statement just because it is intended to be provided at a later stage of the sales process. Roll-over risk warnings on website banner adverts are not sufficient. The audience was also reminded that whilst image advertising (see e.g. COBS 4.5) may be exempt from many of the financial promotion rules, it is important to bear in mind the limited areas covered by that term (basically restricted to name, logo, contact details and types of activities).
Mr Gordon gave the audience five points to take away with them: ensure that digital media information is kept up-to-date; consider the suitability of the medium for the product e.g. advertising a complex product on Twitter would not be fit for purpose; ensure promotions are standalone compliant; ensure risk information is clear and prominently displayed; and if you cannot make the promotion compliant within the allocated space then do not advertise. In the words of the speaker “digital media is very much on our radar”.
We are reminded that the FSA monitors advertising in all media and contacts firms if they see problems. The regulator also welcomes consumers and firms reporting non-compliant promotions to them and will investigate all complaints received.