The disclaimer lottery – which one are you using?

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Disclaimers, disclosures – whatever you call them, they are a part of life for every regulated business.

These are the ‘small print’ you find on financial promotions, websites and customer communications, detailing the conditions under which the content is published.

A disclaimer may be a risk warning, about the nature of an investment. It might cover the views represented in a thought-piece – for instance, ‘The views and opinions shown in this document are those of the author, unless otherwise noted’. Or it might be confirmation of the firm that has published the material – ‘This document is issued by XYZ company, whose registered address is 123 City Road, Town’.

As a reader, you might not take much notice of them – but as a business, they are a regulatory requirement, and if you want to reduce your marketing risk, it’s imperative that they’re correct.

For marketing, business development and compliance teams, this can represent a huge headache – and making sure your marketing materials have the correct disclaimer can be something of a lottery.

What do you need to think about?

Some of the things you have to consider include:

1.  Does it refer to the correct part of the business?

Many firms have numerous subsidiaries delivering different services – your asset management, for example, might be provided by a different entity to your investment advisory work. Making sure your disclaimer references the right business entity is essential.

2.  Is your registered office address and other company information correct?

Another regulatory requirement is for your company and office information to be up to date. If you have recently moved offices, or if some entities have different registered office addresses or company registration numbers, you need to make sure this is accurate.

3.  Is the material going to be used in more than one country?

Different jurisdictions have differing requirements. If you're producing material for use outside the UK, or in multiple countries, this may have an impact on the disclaimer you use.

4.  Is the disclaimer written in an appropriate style for your audience?

              Your communication needs to be fair, clear and not misleading – and so does your disclaimer. You need to ensure the way it’s worded is suitable for your                intended reader: if it’s aimed at a technical professional, you can expect them to have a certain degree of knowledge of specialist terms. For the               
              consumer, you will need to avoid any jargon or technical language.

Sometimes, documents may need more than one disclaimer or disclosure, depending on the nature of the content.

Getting it right – a complex task

Making sure you get all of this right can be a nightmare – even if you work in marketing or compliance, and are probably best placed to know what’s needed.

It’s not uncommon to see huge spreadsheets detailing the disclaimers that need to be used for each type of publication. The number of variances can make selecting the correct one a complicated challenge – while using the wrong one represents a significant compliance risk to your business.

If you give other teams responsibility for the production of certain materials, it can be even harder to manage this properly. Sales teams, for example, often produce their own presentations and pitch documents.

Making sure they have access to – and use – the correct disclaimers can be difficult. Often old presentations or documents are over-written (but disclaimers left as they were), meaning out-of-date versions slip through the net. You need to ensure that your business development team, or anyone else with responsibility for producing materials, has the correct information and uses it at all times.

Reduce the potential for error

Minimising others’ ability to change disclaimers can help here. If you can find a way to ‘lock down’ content such as your registered office address or regulated statement in documents, you can prevent them being edited and therefore ensure that any materials using them are correct.

Ensuring that any presentations or financial promotions are required to go through compliance approval every time they are edited can also reduce your marketing risk by eliminating the potential for outdated disclaimers to be used. Some of the best marketing compliance software can manage this for you, and may be worth investigating.

Training for different parts of the business can also be invaluable – helping them to understand the importance of correct disclaimers can minimise the chances of the wrong one being used.

Even once you have ensured that the correct disclaimer is included, your work isn’t done. There are other considerations – such as its size and prominence – to take into account. The FCA is very keen that disclaimers and risk warnings are suitably prominent and will take action against firms that fail to meet its requirements.

When you consider that disclaimers are only a small part of the regulatory jigsaw, it’s easy to see why producing compliant promotions can be such a challenge for marketing teams in regulated businesses.

If you want more tips and suggestions to help you ensure that your financial promotions are compliant, you might find our Compliance Guide to Financial Promotions a useful read. It’s free, and you can download your copy here.

 

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