EDITORIAL: Time to agree on financial PR

Financial PR people are not known for their ability to join forces on issues of industry-wide importance. Although some of the more established and vocal financial PR practitioners have clubbed together to form one of the IPR’s most active groups, only 10 per cent of PRCA members are agencies which practise financial PR.

Financial PR people are not known for their ability to join forces

on issues of industry-wide importance. Although some of the more

established and vocal financial PR practitioners have clubbed together

to form one of the IPR’s most active groups, only 10 per cent of PRCA

members are agencies which practise financial PR.



Despite a long-standing threat from the City to impose regulation on PR

agencies operating within its walls, no successful attempt has been made

to avert that threat by creating a system of self-regulation. Even now,

when the City seems likely to use the stick it has brandished at

agencies for so long, the industry is utterly divided over how to

respond.



A poll in June of IPR City and financial group members revealed an even

split over whether to argue for tighter controls by the Financial

Services Authority (FSA), the City regulator. Some members were still

undecided.



The FSA is consulting on proposals to fine agencies for abusing

privileged information or issuing misleading information. The fines

would apply to agencies dealing with six London financial markets and

would bring PR in line with other City advisers, such as brokers and

accountants.



The IPR City and financial group’s leadership wants support from its

members for specific wording in FSA rules to make their application to

PR professionals explicit.



City PR people have long been divided over whether self-regulation is

preferable to coming under the authority of a watchdog, or whether the

rather vague controls on their work provided by bodies like the Stock

Exchange and the Takeover Panel are sufficient.



Those in favour of tighter regulation argue that because there is no

register of financial PR agencies, the industry is open to cowboys. They

believe that introducing a compulsory code of practice on a par with the

codes followed by lawyers or bankers will mean that when sensitive

information is leaked to the press, the finger will not automatically be

pointed at the PR adviser.



Those against tighter rules argue that any code would be widely ignored,

because it is often the client, with the backing of their legal

advisers, which asks agencies to leak information. They argue that any

rule book would be regularly ignored and would simply provide surface

gloss, a poor substitute for real responsibility.



The IPR has until October to put its case to the FSA. Unless its members

can agree a common line, the FSA may introduce rules nobody is happy

with.



If IPR representatives cannot argue either that professional standards

are high and do not need regulating, or that the industry is not afraid

to accept tighter controls, PR’s image will suffer further.



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