FMA seeks consultation on proposed guidance for advertising
The FMA have opened consultation to the industry on its proposed guidance regarding advertisements for financial products.
Thursday, November 19th 2020, 6:51AM
In a statement released today, the FMA have announced that they are seeking industry consultation on their proposed guidelines regarding advertising for financial products.
The statement said that for the FMA, “advertising is an area of concern due to the influence it may have on investor knowledge and behaviour. The proposed guidance sets out the FMA’s expectations of what good conduct in the advertising of regulated products looks like.”
The guidance focuses on how “fair dealing” requirements in the Financial Markets Conduct Act (FMC Act) apply to advertisements for financial products.
As well as traditional advertising mediums in print, broadcast, digital and outdoor formats, the guidance also applies to mobile apps, product brochures and promotional fact sheets, direct mail (eg written letters or email), group presentations and seminars, and advertorials.
The guidance sets out that advertisements should:
- be truthful and accurate
- take care when comparing different products
- balance risk and reward
- take care with phrasing and jargon
- ensure forecasts are based on reasonable and supportable assumptions
- not overemphasise performance
- prominently display warnings and disclaimers
- clearly disclose fees and costs
- not claim to be endorsed, approved or regulated
- be discernible from other content (such as sponsored content)
- identify offers that are made only to wholesale investors.
The guidance complements existing information published by the FMA, including the crowdfunding and peer-to-peer lending guidance, regulatory response guidelines and website content on the FMA’s approach to the fair dealing and stop order provisions.
Submissions close on February 16, 2021.
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