A complaint that a double page advertisement run by Spicers Portfolio Management in Time magazine was fraudulent has been upheld by the Advertising Standards Complaints Board.
The ad purports to be a case study of a young man's father and quotes a fictitious investor, Mike Ward, at length. The small print of the ad says that names, events and some circumstances have been changed to protect the investor's confidentiality.
However, complainant, Peter Calderia, says: "I suspect most readers of the advertisement would view the text, given the degree to which the investor is quoted, as a genuine case history."
He also questions the return, which is purportedly based on "genuine Spicers case history."
He says it equates to about 2% annually which, in his view, is dismal.
"I believe the advertisement is fraudulent," he says in his complaint.
In its response Spicers disagreed with the complainants return calculations saying that under the Dietz method, which is the standard time weighted return calculation method, the annual returns of the client are just over 4% tax paid.
"Given the volatility of investment markets over this period shown, we believe the returns are quite acceptable."
Spicers says the ad is an actual case history and it changed the investor's identity to protect his identity and privacy. It also says the quotes used are representative of comments made to the investor's adviser.
In its decision the board said "the technique of quoting a 'fictitious' investor had the potential to, in effect, factualise fiction through the use of dramatisation and emotion and therefore should not be presented, particularly in financial advertising, as being factual."
It ruled that the advertising code, which specifies that financial advertisements should "strictly observe the basic tenets of truth and clarity had been breached.
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