Listicle: Five ways to comply

ways to comply with financial promotions rules

The Financial Conduct Authority (FCA) has rules for firms wishing to promote products and services. The rules apply to brokers as well as lenders and other firms operating within the financial services industry. Whilst there is specific guidance for the different high-level product areas, the overarching message is that the presentation and substance of any promotion should be clear, fair, balanced, and not false or misleading regardless of media.

Here are five things to consider when checking that your promotions comply with the rules.

1. Be clear

It can be hard to include much information especially in say, a small advert, but do make sure that you cover off the necessities. For example, for asset finance, make clear whether the financial promotion is for a credit product, a hire product or both. When promoting a mortgage make it clear that interest will be charged. Also, if you use a trading name, make certain to include the registered business name – and the registered address too.

2. Be fair

Consider the audience. Would the target demographic reasonably expect to understand the information provided? Advertisements which target customers with regulated credit agreements may be unsuitable and not fair, by virtue of a client’s indebtedness, poor credit history, age, health, disability, or any other reason. Don’t use complex wording or jargon.

3. Be balanced

In addition to promoting the benefits of a product make certain to give equal weight to and articulate the risks. For example, you can say if a product has a low interest rate and fast access funds, but if it also has a higher interest rate for late or missed payments, you must state that too. The risks must be as prominent as the benefits and not hidden away in small print.

4. Be true

Do not state anything which isn’t 100% true. For example, do not display the NACFB logo unless you are a full Member of the Association. Whilst you might be registered with the FCA, never use their logo as this is not permitted.

5. Don’t be misleading

When promoting a product or your services, it is important to not make any statements that are inaccurate or cannot be substantiated. For example, do not say that your firm or product is the most experienced and knowledgeable if there is no real way of confirming the validity of such a statement.

Do bear in mind that the extent of any analysis and due diligence needed to be able to confirm that a promotion adheres to the rules will vary from case-to-case and will largely depend on both the form and content of the promotion.

As part of NACFB membership, brokers have access to documents and training to help them with their financial promotions. There is a policy document which explains the requirements placed on firms when developing and publishing financial promotions. To assist with day-to-day operations, a checklist and a log template are also available. The online training courses can be used as refreshers or an introduction for new staff. To access both the documents and the training, simply log in to your account via nacfb.org