On 19 January 2010, the FSA published the results of an independent three year assessment of financial promotions compliance standards. The review showed a significant improvement in the standard of financial promotions and has helped the FSA identify a number of issues that require further attention from firms.
Key messages from the review:
- Balance: The review found that some promotions are unbalanced due to insufficient prominence of key product risks, including poor positioning and the use of small print.
- Clarity: Some promotions fail to give sufficient product information or do not convey an accurate impression of the product.
- Misleading claims: The use of past performance information, headline claims and unsubstantiated indicative quotes can create a misleading impression of a product’s competitiveness and performance.
- Stand-alone compliance: The FSA expects all financial promotions to be ‘stand-alone compliant’ with the rules and guidance. Firms should not rely on subsequent promotions, communications or pre-sale systems and controls to correct inadequate disclosures in their financial promotions.
The FSA has published the detailed findings of the review in relation to press promotions and internet promotions. It has also set out examples of good and poor practice.
The FSA states that it remains committed to improving the standard of internet financial promotions, particularly given the continued growth of the internet as an advertising medium. The FSA will be carrying out a further thematic review of internet advertising in late 2010.
View FSA independent review of financial promotions compliance, 19 January 2010