witter, Facebook, LinkedIn, blogs and iPhone apps: these words were not even in our vocabulary a few years ago, but now they play a prominent part in our everyday lives as just a fraction of the ever-increasing new media phenomenon.

Last month, Facebook hit the 500 million users mark, meaning if it was a country it would be the third largest in the world.

With this in mind, such channels are continually flaunted as vital business marketing tools, and commentator after commentator argues that the networking prospects and chances to improve knowledge and skills are just too good an opportunity for advisers to miss out on.

However, the highly regulated world of financial services has prevented many from jumping on board, and it is feared that a recent FSA report will only fuel further scepticism.

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The report studied 30 adviser firms’ Twitter and Facebook pages, which offered financial advice. It also reviewed financial forums, examining posts and comments discussing insurance, investments and mortgages.

The FSA stressed that the rules of financial promotions made using new media are no different from those made using any other medium.

The report found:

‘Some promotions lacked risk warnings. Other promotions, while not very specific about products or services, nevertheless went beyond the definition of ‘image advertising’. Firms may not have considered these factors to meet the definition of a financial promotion and therefore have not applied the relevant communication rules.’

‘Image advertisement’, the regulator clarifies, consists only of the firm’s name, logo, contact point and reference to the types of regulated activities provided or to its fees and commissions.

When a communication goes beyond this, it will need to comply with all relevant financial promotions rules.

Research by social networking site IFA Life suggests that advisers cannot afford to be put off social media: “Fewer than 5% of IFAs have a written down marketing plan – let alone an internet marketing plan – let alone a social media plan,” says founder Philip Calvert.

And with 100,000 Google searches per month for ‘independent financial advice’, he warns that this attitude needs to change.

“Advisers have more to fear from not using the internet as a communication tool – of which social media is a key and growing aspect. Brokers have no choice but to learn how people use the internet and to develop a robust internet and social media strategy,” he says.

Key considerations

Imagine that an adviser decides to get involved. He sets up a blog and activates a Twitter page. How does he ensure he is meeting compliance requirements at all times?

Richard Smith, broker marketing expert at theinternetconsultancy.com, believes if something needs to be sa