In a hard-hitting speech to the Building Societies Association, FSA managing director Michael Foot gave a foretaste of likely FSA policy in respect of two aspects of investment advertising.
Topic: Investment advertisements
Who: Financial Services Authority, Standard Life
When: June 2000
Where: London
What happened:
In a hard-hitting speech to the Building Societies Association, FSA managing director Michael Foot recently gave a foretaste of likely FSA policy in respect of two aspects of investment advertising. First he described as "idiotic" the current situation with regard to radio advertising for eg unit trusts, where a significant portion of the airtime was taken up with gabbled wealth warnings. Foot promised an overhaul of the rules that supposedly required such practice.
Secondly he indicated a likely clampdown on use of past performance figures in advertising for investment products. Although he denied a suggestion earlier that week by Standard Life that the FSA were going to ban use of past performance statistics altogether, Foot did make it clear that the FSA would be coming down hard on use of past performance in such a way as to suggest that the advertiser will go on being a high performer. Quite how this will be done without more small print, however, remains to be seen.
Why this matters:
Once the Financial Services Bill finally becomes law and the FSA leviathan swings fully into action, the chances are the world of financial product advertising will see something of a shake-up. All we can do at present is monitor pronouncements like these to give a foretaste of what’s to come, but investment product advertisers might do well to take a careful look at very long term promotional plans, as there could be radical changes in store.
