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The UK's New FCA Guidelines: What It Means for Advisors (Part 2)

shutterstock_137467250This is part 2 of a 2-part series. Read part 1 here.
Best practices for advisers on social media
By including what we consider to be the three vital elements of any best practice social campaign, the FCA guidance provides firms – and other European regulators – with a solid foundation on which to base their own social media policies:
1. Training: The guidance calls for investment in staff training so employees can understand the difference between appropriate and misleading content. This is especially important when employees use the same social media accounts for both business and personal purposes, where the lines between work and play can easily become blurred.
2. Supervision: The guidance covers the need for a robust approval process, ensuring that even the most diligent of adviser’s interactions are always checked and signed off.
3. Recordkeeping: Finally, it provides practical advice on how (and for how long) these campaigns should be archived, so firms can produce an accurate audit trail of how they’ve interacted with every customer.
Work is not done for the FCA
However, the rapid rate of change witnessed in the social media sector means that, to some extent, the FCA is always going to have to play catch-up with what’s happening in practice.  In comparison to equivalent guidelines in the US – which Financial Industry Regulatory Authority FINRA) introduced more than  five years ago, and where social selling in the financial sector is  ahead of the UK – the UK framework does have a few gaps.
The current FCA guidelines could be bolstered by adding more practical examples of both compliant and non-compliant activities.  Real life examples provide vital direction to busy advisers eager to implement campaigns without falling foul of the regulator.  While the framework does include a number of example tweets, posts and images to help advisers ensure their social content is always ‘clear, fair and not misleading,’ there are some omissions.  For example, it remains unclear whether an adviser could compliantly like or share a post from a financial institution without it being perceived as entanglement. Clarity of these points would clear up any lingering confusion and will likely be added to the guidance as the market matures and more use cases emerge.
Neither do the guidelines stipulate the penalties firms could face if their advisers breach these rules.  Nor is there any mention of how the FCA will audit firms to ensure ongoing compliance.  In contrast, FINRA more established guidance takes much more of a ‘carrot and stick’ approach to best practice.  As with the FCA, the carrot comes in the form of an actionable framework that is designed to empower financial advisers to confidently engage with customers over social channels. FINRA’s stick comes with its enforcement capabilities, comprising both auditing powers and penalties for non-compliance.
Final thoughts
It’s clear that the FCA’s framework is a hugely positive development for the industry. It’s increasingly impossible to ignore the potency of social media as a sales channel, and the regulator is making great strides to ensure firms understand exactly what they need to do to maximize this opportunity. Indeed, these guidelines should not be viewed as yet another tick box exercise to ensure compliance. Rather, the FCA has provided much needed tools to help advisers find and engage with a new generation of customers.
However, in my experience, firms are much more likely to continuously invest in the training, processes and systems that ensure best practice – and prevent mis-selling – if they know they could be audited and face penalties.  It will be interesting to see if the FCA toughens up its stance – transforming these guidelines into enforceable rules – as usage of social media by consumers continues to increase and social selling starts to gather real pace in the UK market.
This article was originally published on thewealthnet.
If you are interested in contributing to how social media should be regulated in the UK or in continental Europe, we are interested in hearing from you. Please contact us at
Disclaimer: The material available in this article is for informational purposes only and not for the purpose of providing legal advice. We make no guarantees on the accuracy of information provided herein.
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The UK's New FCA Guidelines and What It Means for Advisors (Part 1)

This blog post is part 1 of a 2-part series. shutterstock_138153371
Back in mid-March, the FCA (Financial Conduct Authority) finalized its guidance on financial promotions over social media channels. The guidelines, which were the result of extensive engagement and consultation with stakeholders from across the financial services industry, have been designed to provide further clarity to financial advisers which have – until now – had little explicit direction on how to ensure their social media campaigns remain compliant.
The launch of these guidelines is timely. On a macro level, UK consumers are energetic and committed users of Facebook, LinkedIn, Twitter and Google+, with Ofcom estimating that, in 2014, 66 percent of online adults had at least one active social media account. With these users becoming more and more comfortable with brands marketing their services over these platforms – and with a growing population of digital natives who expect to be sold to in this manner – it is not difficult to understand why financial advisers want to leverage social channels. Indeed, many already are. Research undertaken by Intelliflo showed that, as of October 2014, some 58 percent of UK financial advisers were already using social media for business purposes.
But while there’s been a will to promote services over social channels, there hasn’t necessarily been a way; or at least there hasn’t been an officially endorsed one. While the Intelliflo research found that more than half of advisers have already engaged with prospects and customers over social channels, only a quarter of them stated their employers had introduced policies to govern and monitor these activities. This is a worrying mismatch, and suggests that some advisers are engaging with customers and prospects without the checks and balances in place to ensure that they are representing themselves and their firms appropriately across social networks.
The major concern here is that advisers can easily – either unwittingly or on purpose – fall into the trap of mis-selling, bringing their brands into disrepute. The new FCA guidelines will go a long way to clarifying what advisers can and can’t do over social. And while these rules come some time after we’ve seen social selling in practice, the regulator should be commended for recognizing that the complexity of social media marketing means it needs to be treated differently from traditional advertising and marketing campaigns. As the first European regulator to introduce specific rules to cover social media, the FCA could even be described as a trailblazer in its field, and we should expect to see similar moves across the rest of the continent over the coming months.
Check in next week for part 2: Best practices for advisers and what the FCA still needs to do.
This article was originally published on thewealthnet.
Disclaimer: The material available in this article is for informational purposes only and not for the purpose of providing legal advice. We make no guarantees on the accuracy of information provided herein.
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On the road with LinkedIn, Facebook, and Efma across Europe

As Hearsay Social expands its international presence, we’re pleased to have spent the last couple weeks on the road with our partners LinkedIn, Facebook, and Efma across Europe.

At the LinkedIn Finance Event in London, Chris Andrew (Managing Director, UK and Europe, Hearsay Social) spoke on compliance best practices. He later joined the first European Facebook PMD (Preferred Marketing Developer) Summit held in Dublin and also participated on a panel with Lee Jay Burningham (Head of Financial Services, UK & EMEA, Facebook) at the Financial Services Social Media event in London. Peter Caryotis (Sales Director, Europe, Hearsay Social) also spoke at Efma’s Banking on Innovation event in Barcelona.

At the LinkedIn event, Forrest Baker (Head of Global Insights, LinkedIn), Christina Jenkins (Head of Insights, LinkedIn), and Laura Collins (Research Consultant, LinkedIn) presented on content and industry trends across the international financial services community. Some highlights from the event include new data on social media usage by high-net-worth individuals (HNWI):

  • 70% of HNW individuals in the UK use social media and this number is 99% in Hong Kong & Singapore.

  • In the UK, 71% of these HNW individuals access LinkedIn multiple times per week.

HNW individuals spend their time on social networks connecting, researching and reading up on business and financial information, following influencers and brands, and creating content of their own. Some other key findings:

  • 48% of these individuals have started gathering their own information on products and services, and they often use this information to complement the advisory services they seek out from financial firms.

  • 30% of HNW individuals have actively recommended or made a referral via social media.

Chris later took the stage to share a number of industry specific tips on compliance best practices, a few of which were highlighted by attendees on Twitter. He especially focused on the four steps to social business success: get found, build your network, “hear” or listen for key events, and “say” or build an engaged audience with quality content.

For a list of our upcoming global events please visit our website.  We hope to see you soon!

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Expanding to Europe and mobile: Hearsay Social Clara Shih discusses #TwitterIPO on CNBC Europe

You probably know that Twitter has over 230 million active users, but did you know that over 78% of those users live outside the U.S? It’s no wonder then that Europe was equally curious in what the latest social network IPO means for business.
In this new segment from CNBC Europe, our CEO Clara Shih discusses Twitter’s successful IPO as well as future plans for Hearsay Social, including international expansion and further development in mobile.
Also: see Clara’s segment on CNBC from earlier in the week.

How can you use social media to drive sales? Social business experts weigh in at FT Digital Media Conference in London

Hearsay Social is proud to have participated in the Financial Times Digital Media Conference, the flagship annual event that brings leading individuals together to discuss technological disruption of new and established media. Speakers included Sir Martin Sorrell, Group Chief Executive of WPP; Marion King, President of MasterCard Worldwide, UK & Ireland Division; and Clara Shih, CEO and Founder of Hearsay Social.

“This event is very focused on what the FT does best,” explains Andrew Edgecliffe-Johnson, Media Editor, Financial Times, “exploring the business models that will determine success in different markets around the world, from the perspective of both senior leaders of global media groups and today’s most promising digital entrepreneurs.”

Joining Clara on the “Business of Social” panel were Richard Waters, West Coast Managing Editor of the Financial Times; Christian Hernandez Gallardo, Director of UK and Pan-Euro at Facebook; Gilles Storme, VP of Advertising Sales, EMEA at; and Richard Moross, CEO & Founder of

From left to right: Richard Waters, West Coast Managing Editor of the Financial Times; Hearsay Social CEO and Founder Clara Shih; Richard Moross, CEO & Founder of; Gilles Storme, VP of Advertising Sales, EMEA at; and Christian Hernandez Gallardo, Director of UK and Pan-Euro at Facebook.

“One of the highest signals that you will likely want to have a mortgage or car loan is a life change,” said Christian. “If you got engaged or are expecting, I guarantee you’re going to have a lot of expenses coming up. You will probably need some advice from a helpful financial advisor. Those social signals feed into an econometric model, and then we help them go back and actually talk to the customer at the right time.”

In an age where mistrust of corporations has never been higher, many companies are seeing success by using social media to promote their employees as ambassadors of the corporate brand.

“The traditional big media world is much more affected by individuals,”  said Clara. “There is a blurring of lines across paid, earned and owned media. The same piece of content coming from a person versus a corporate brand performs better from an EdgeRank perspective and also ties back to individual curation. Consumers want to hear from human beings, oftentimes a friend or trusted advisor.”

More significantly, companies that effectively empower their employees on social media can activate an additional channel to connect with customers.

“Media is not just about paid, owned, and earned; there is also employed media. Your brand ambassadors can be extremely effective authentic channels for connecting with your customers and prospects,” Clara explained.

Watch a recording of the conversation on FT Live.

Process and policy both necessary for social media success: Hearsay Social joins the Social Media Leadership Forum London

The Social Media Leadership Forum convened in London this week to discuss social media for businesses. Over the course of the seminar, senior executives shared their views on the strategic role of social media for business, covering topics including the value of social media for B2B and B2C organisations, delivering cost savings, and how social media is evaluated at the board level. Social media also emerged as a valuable tool within the organisation, powering effectiveness and agility.
Clara Shih joined panelists Dennis Adekunle (Director, Social Media & Collaborative Services, GlaxoSmithKline), Eihab Mohamed (Customer Engagement Director, Telegraph Media Group) and moderator Justin Hunt (Founder of Social Media Leadership Forum & It’s Open) to emphasize the need for structure and training around social media to reap the full benefit.
“In this age of social media, where all your employees are now marketers, how do you maintain an authentic voice and consistent brand across all your relationship managers?” Clara asked the audience. “We’ve seen a combination of process and policy work best across our clients.”

We're bringing the social selling revolution to Europe

We’re very excited to announce that Hearsay Social has launched in Europe!
European companies have started to recognize the tremendous business benefits arising from the use of social media. In the U.S. and abroad, tens of thousands of reps from the world’s largest sales forces already rely on Hearsay Social to move beyond outdated cold-outreach sales tactics to achieve quality conversations driven by social media insights and trusted referrals
As part of today’s announcement, the Hearsay Social platform has been updated to support German, French, and Spanish in addition to English, enabling salespeople from some of Europe’s largest economies to use the tools in their local language. Additionally, we have opened a new European headquarters in the heart of London.
We are delighted to answer increased demand by investing in expansion in the U.K. and across continental Europe.
Read the press release.