3 FCA rules every financial copywriter needs to know

Being a financial copywriter means that you’ll need to juggle a mix of different skill sets. Understanding the financial product, Search Engine Optimisation practices and nailing the brand tone of voice are one part of it. In the UK, another important part is ensuring that you’re not violating the Financial Conduct Authority’s (FCA) rules on communication. This is really important. If you don’t follow the rules, you’re putting your company at serious risk of getting slapped with a huge fine, and more importantly, you could be misleading customers.

The FCA has categorically stated that all communications must be fair, clear and not misleading. You can read more information about what this means here. Your Compliance team should be able to help guide you. In this blog, I’ve put the very minimum requirements that you’ll need to include across all of your financial copy.

1. If capital is at risk, you need to say it

If you’ve ever looked at an ad or article by an investment firm, you’ll usually see a disclaimer floating around. It’ll say something along the lines of, “Capital at Risk” or “With investing, you may get back less than you put it in”. This is because of the strict FCA rules. The font and colour of the text is required to be easily readable for customers. It can’t be hidden or sneaking around in the background. While it can be a bit of a buzz kill for content marketers, it’s really important.

The same goes for writing blogs, articles or any other text. For example, if you talk about the benefits of investing, you have to balance it out. You’ll need to mention that you could get back less than you put in, and that there are no guarantees.

If you’re looking at past events, such as how much money you’d have now if you’d invested in the FTSE 100 ten years ago, you’ll need a disclaimer too. This is usually something like, “past performance is not indicative of future results”.

2. Your examples and projections have to be reasonable

We can all make grand calculations for how much money you’ll have in the future if you invest. But if you promise the world to customers you could be misleading them. Make sure that any examples you give are fair. So for example, you wouldn’t expect markets to grow by 17% year-on-year. That’s silly. Keep it closer to 5 – 7%. Make sure that your examples are using a middle-ground level of risk. Showing a balanced and fair representation of what customers can expect is essential. Don’t go overboard, just be honest.

If you are writing anything to do with tax, you’ll also need to explain to customers that it could change in the future. Indicate which tax year you’re writing in, and that your calculations have been based on that. This can apply for a lot of financial products, including ISAs and Pensions.

3. Avoid using the word “protect”

Only use this word if the client’s money is actually 100% protected. For example, if you’re talking about the Financial Services Compensation Scheme (FSCS), you’re in safer waters. Up to ￡85,000 of customers’ money will be reimbursed if certain requirements are met. Outside of this, you should only use the word “protect” if you can guarantee to customers that its totally true. Which when you think about it, is not that often.

However, it can be very hard to avoid, especially when you want to talk to your clients about value products. Many customers have a fear that they will lose money by investing it, so addressing it fairly is pretty important. People have misconceptions about risk and how to approach it. Here are some phrases and tactics that I’ve used in the past which have been approved by internal Compliance and published externally:

• Aim to protect …
• Aim to preserve …
• Can help protect …
• Can help shield against …

 Read the original article and more useful tips for financial copywriters here

Now it’s time for my own disclaimer. I’ve written this blog as a quick and helpful guideline, based on my qualifications and experience as a financial copywriter. Any financial copywriter should read the whole of COBS 4, it’s your responsibility to do this when you write for clients.