I agree with much of what Justin Downes says in his comment on the
regulation of financial PR. Without the same regulatory framework which
governs financial institutions, the consultant will always be open to
pressure from clients and other financial advisers to play fast and
loose with the rules.
As long as financial PRs appear to operate in an unregulated
environment, it will be open to City commentators to assume that they
operate in ways which other City advisers do not.
What may be needed is a clarification of the rules regarding
communication of price-sensitive information. If so then the IPR City
and Financial Group would willingly engage in immediate dialogue with
regulators in the City to clarify these areas, so that clients and other
City practitioners are in no doubt about what financial PR consultants
However, the most appropriate route might be to bring financial PR
practitioners under the authority of a recognised self-regulatory
organisation, under the umbrella of the SIB. Were they willing, the IPR
or the PRCA might qualify as such an organisation. Membership would
reduce pressure on financial PR consultants, provide greater consistency
and transparency in City affairs and enable professional standards to be
raised through examinations or other accreditation.
However, this would all be in vain if the IPR and the PRCA are unable to
enforce acceptable standards of conduct in ways similar to those wielded
by other SROs, namely suspension or expulsion from practice.
It is worth remembering that financial PR consultants are agents for
their clients. Without the active co-operation of corporate clients and
other financial advisers, such attempts at ‘cleaning up our act’ are
bound to founder on the rock of cynical self-interest.
Paul Kafka, Chairman, IPR City and Financial Group