Social media record keeping and compliance – 3 simple steps to take
Following the recent FCA guidance paper on social media, adviser firms need to consider an effective system that will enable social media to be embraced without causing a record keeping or compliance headache. James Thompson, regional director, Smarsh UK explains the changes and offers three simple steps to help you stay compliant
Whether it’s a white or a green paper, or the somewhat newer mantle, a ‘guidance’ paper, there is typically a wealth of headline information included in regulatory statements that often masks the underlying detail. And the final guidance published by the Financial Conduct Authority (FCA) on social media was no exception. Albeit an update on previous guidance published in August 2014, there remained much open to interpretation.
Choosing to concentrate more on the promotional aspect of digital communications, the guidance was light on detail regarding advisers’ regulatory responsibilities when it comes to record keeping. Arguably, the only explicit clarification from the guidance – FCA 1.24-1.26 Social Media Record-keeping Rules – was that firms can no longer rely on social media platforms as a sufficient means of retaining records.
Instead, firms are now expected to have a senior person approve ‘significant’ social communications and to have an ‘adequate’ system in place to capture and retain social media posts. But perhaps it is the use of nebulous terms such as ‘adequate’ and ‘significant’ that is leaving many adviser firms in doubt as to whether their current practices comply with the record keeping directive or not hit the mark or not. In addition, it could deter adviser firms from fully embracing and embedding social media into their business practices.
Rather than being deterred – and therefore missing out on the tremendous potential social media can provide – adviser firms need to consider an effective system that will enable social media to be embraced without causing a record-keeping or compliance headache.
As a rule of thumb, firms now have to approve, supervise and retain social media content. Whilst this process will be unfamiliar to many firms, the reality is its much more straightforward that many think and it can be done in both a meaningful and cost-effective way. There are a few simple to follow steps that advisers can start with…
1. Social Media Policy
A social media policy is a sensible starting place. If you don’t have one, now might be the time to create one that includes the new directives from the FCA finalised social media guidance (and other relevant risk management provisions noted in 1.26). A good policy will include information on which social media platforms are permitted and outline who is authorised to use social media on behalf of the firm.
Having a social media policy will enable adviser firms to set out clearly how social media content is approved before it’s shared publicly. It is this part of the policy that specifically addresses how, when and by whom, content sign-off is made within a firm by a ‘person of appropriate competence and seniority’, as outlined by the FCA 1.24 directive.
A key element of the policy is the training offered to help support and implement this. It is worth advisers investing in training for all those within their firm who use social media on behalf of their organisation, so that they not only understand but can also follow the firm’s social media policy. Given the pace of change across social media platforms, it is a good idea for firms to outline ongoing social media training initiatives to keep pace with this and any evolving regulatory guidelines.
Training for advisers could touch on aspects of the guidance such as business versus personal use clarifying what business communications are permissible for use on social media. It might also be an idea to include specific instructions for any supervisory review and approval of content before or after an adviser shares it publicly.
3. Social media supervision
The FCA record-keeping directive 1.25 requires firms to keep adequate records of any ‘significant’ (that word again) communications. The sheer volume of posts, responses, and other information generated via social media can make the task of maintaining this complex. Luckily there are social media archiving solutions available to help. An archiving solution will not only enable advisers to retain official records of posts but it can also show an automated audit trail, which can help document social media supervision and any corrective actions taken (otherwise known as social media policy enforcement).
Following these steps should hopefully help make life easier and will ensure advisers are adhering to the new FCA approval, supervision and record-keeping rules.
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