On 13 December 2018, the FCA published Occasional Paper No 47 – Blackbird’s alarm call or nightingale’s lullaby? The effect of tweet risk warnings on attractiveness, search, and understanding.

This Occasional Paper reports on the results of an experiment that investigated the impact of specific features of social media posts and balancing information, including risk warnings, on consumer understanding and product preferences. It also examined the impact of standalone compliance on understanding, preferences and search activity.

The results of the experiment show that, for character-limited social media, standalone compliance reduces consumers’ information search and understanding of risks, ultimately leading to them choosing less suitable products. The results also demonstrate an important role for well-placed risk warnings in educating consumers. More detailed risk warnings on product webpages were found to be most effective at increasing understanding, and they were significantly more effective when designed using insights from behavioural science.

The FCA published guidance on social media advertising in 2015, which reminded firms that any form of communication (including character-restricted social media adverts) are capable of being a financial promotion and are therefore required to contain certain information, including any necessary risk warnings. The FCA considers that such standalone compliance of adverts is important, creating a consistent approach for firms offering different products types and ensuring consumers receive a balanced explanation of a product.