With the increasing technological nature of remote working, financial advisers may be at risk of misconduct if they use certain social media and communication apps for their business.
The Financial Conduct Authority (FCA) raised the issue in its latest Market Watch newsletter, where it encouraged advisers to refrain from using channels such as WhatsApp to share “potentially sensitive information connected with work”.
This is because the apps offer unmonitored and/or encrypted communication services, which could compromise a company’s compliance obligations.
“Firms will need to ensure that, if such apps are used for in-scope activities on business devices, they are recorded and auditable,” the regulator warned.
Action
The FCA has already taken action against individuals for misconduct involving the use of WhatsApp and other social media platforms to arrange deals and provide investments advice.
The watchdog added: “It is important for firms to proactively review their recording policies and procedures every time the context and environment they operate in changes.
“We expect firms to have a rigorous monitoring regime, commensurate to the increased risks, where in-scope activities may be conducted outside the controlled office environment.
“As part of this, individual senior managers have an important part to play in establishing and embedding the right culture and governance within firms to continuously improve the standard of conduct at all levels.”
Covid financial changes
In other news, the FCA is also sending out its third covid-19 survey to gather information on advisory firm’s financial resilience.
Emails will be sent out between 13 and 19 January 2021, and the regulator said that the completion of the survey is mandatory.
The aim of the study is to understand changes in companies’ financial positions over time.
As a result, the FCA expects to repeat similar surveys in the future.
There have been many concerns about phishing and scam emails pretending to come from the watchdog as of lately, and the regulator said to only trust emails coming from either ‘[email protected]’ or from an ‘@fca.org.uk’ email address.
