A framework for building a compliant programme for staff using sites like Twitter and Facebook has been created after the FCA finalised plans to crack down on misleading financial promotions through social media earlier this year. 

The Financial Services Forum and Hearsay Social have come up with the guide after working with a group of marketing and compliance executives.

These comprised staff from Axa Investment Managers, Baring Asset Management, Impax Asset Mangement, Jupiter Funder Management, Killik & Company, London and Capital and Shawbrook Bank.

The forum said the need for guidance was reflected in a survey conducted last year by PAM Insight, a wealth management industry group, in which 67 per cent of UK advisors stated compliance and regulatory concerns as the biggest barriers to social media adoption.

More than half of adviser firms have failed to lay out a formal policy on using sites like Twitter for employees – despite warnings from a range of experts about the legal dangers – another recent piece of research found. Intelliflo’s survey found 52% lacked such guidelines.

Earlier this year Smarsh UK’s report showed finance firms had failed to come up with adequate archiving and supervision systems to manage their compliance obligations.

These compliance failures not only risk regulatory fines but reputational damage, bosses have been warned. Michael Clarke, a partner of commercial litigation, at Clarke Willmott LLP, told Financial Planners at the IFP Annual Conference last October that a clear code of conduct or guidelines for social media use was vital.

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David Cowan, managing director of the Financial Services Forum, said: “This initiative is a direct result of need expressed by our members who wanted to develop a comprehensive reference document that will ensure companies can engage online in a compliant and safe manner.

Stewart Conway, head of digital marketing at Jupiter Fund Management, said: "Social media and other digital communication channels are going to become as ubiquitous as email, and the advisors who ultimately succeed in business will be using these channels to interact with their clients, if they aren’t already.

“We need to be prepared for that imminent future. This framework provides practical guidance for companies to implement compliance requirements in that context."

Fiona Cornes, corporate affairs and group marketing director at Shawbrook Bank Limited and a member of the industry working group, said: "While the FCA guidelines on social media provides the ‘what’ aspects of compliance, this reference guide provides a ‘how to’ perspective on what firms should actually do to follow the rules.”

The forum outlined the framework as follows:

There are four focus areas of compliance. The framework consists of four focus areas that financial services firm need to consider when developing and implementing an enterprise social media sales and marketing program. For each focus area, the reference guide provides key questions and recommendations for marketing and compliance teams to consider.

The four focus areas are:

•Create and formalise a social media policy: Setting a formal policy focuses the company on the goals of using social media for business, as well as sets expectations for employees at all levels of the organisation.

•Train employees and provide opportunities for continuing education: A strategic, ongoing training program is essential to ensure advisors understand the policy, and are up-to-date on the latest social media best practices and functionalities.

•Implement supervisory systems and controls to ensure compliance: An approval process that takes into consideration the immediate nature of social media ensures advisors can reap its benefits, such as the ability to share relevant content with their networks, while compliance teams maintain proper control over the content.

•Establish a record-keeping system: Having a system in place that captures, archives and allows for the retrieval of all business communications on social media ensures compliance with FCA regulations.