Don't get caught in social media web, advisers warned
If you promote yourself or your services through social media, watch out - the Financial Markets Authority (FMA) may not like everything it sees online.
Wednesday, January 30th 2013, 12:01PM
by Benn Bathgate
Independent Development Solutions director Barry Read said advisers needed to be aware of potential compliance pitfalls when using social media.
He said issues could arise because the FMA viewed social media – websites such as Facebook, Twitter and LinkedIn – as advertising.
“Regardless of whether communications involve a Facebook post or an e-blast to customers, they are considered to be advertising,” he said.
“Social media content must meet the regulatory and disclosure requirements relative to numerous consumer compliance regulations.”
The FMA has warned against using the acronym RFA in adviertising and also requires that AFAs state in their advertising that a disclosure statement is available - both potential problems when communicating via social media.
Read highlighted the need to include disclosure statement information in a guide he has created for compliant social media use, saying advisers needed to consider whether any social media communication could be considered generic or personalised advice, and whether they were keeping copies for documentation of all electronic communications.
He said that for email messages promoting products or services, advisers also had to consider anti-spam laws, including clear information for recipients on opting out or unsubscribing and the inclusion of a physical postal address.
Group Plus Ltd financial services manager Owen Grauman said advisers should consider the audience for their social media communications.
“Social media does work but it depends on how it is used to target the audience that you want to engage with,” he said.
“It does not work unless it is tailored and one takes the time to work on social media marketing and building up rapport with individuals.”
He cited KiwiSaver and the confusion around whether RFAs could or could not provide advice as one particular issue they had to be mindful of when using social media.
Benn Bathgate is a business reporter for ASSET and Good Returns, email story ideas to firstname.lastname@example.org
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