Financial advice firms publishing exaggerated claims, half-truths, and questionable statements need to brush up on Fair Dealing rules advises Strategi’s Executive Director David Greenslade.
During a webinar on advertising and marketing organised by Financial Advice NZ, he explained the FMA is not just looking at the big end of town when it comes to ensuring companies remain within the law.
He says financial advice firms have similar obligations when it comes to false or misleading statements, unsubstantiated representations, and omissions.
Among the examples cited during Greenslade’s one-hour presentation* was a list of claims he’d seen on the websites of firms he had worked with.
They included statements such as:
- We are the financial advisers for the All Blacks
- We embrace the highest professional standards
- We get our clients the best deal in the market
Greenslade said the All Blacks claim was outdated as the firm’s sole client from the national team left years ago, and the company advertising its “high professional standards” had just one adviser among its five staff with a level 5 qualification (and none were AFAs under the old regime).
And he cautioned one firm against claiming it obtained clients “the best deal” as it worked with just four providers.
“How do you define ‘best deal’ – it needs to be benchmarked against something tangible such as interest rates, structures, or costs,” says Greenslade.”
He recommends the FMA’s view of conduct for those wanting to get up to speed with their obligations when it comes to advertising and marketing.
“It talks about how we should be promoting our services,” he says. “It doesn’t talk in micro detail about it, but around what the FMA expects to see as far as advertising and how that links through to good conduct.”
Greenslade says business owners should look at all their promotional material and decide if it provides an accurate impression of what they deliver to clients.
He says that while we all recognise radio, TV, company websites, and brochures as mediums to advertise, social media and Google ads also need to be managed.
…The All Blacks claim was outdated as the firm’s sole client from the national team left years ago…
“Firms have to be cognisant of their obligations,” he says. “Your (company) website is easy, but some people may use their personal Facebook page to promote themselves as a financial adviser or as the owner of a FAP.
“And when you do that, the advertising obligations we are governed by apply. It means you can’t publish anything deceptive or that is likely to confuse people. And that can constrain what you say and how you say it.”
Greenslade says having links to key disclosure and privacy statements is wise and that anything published can be read be clients and competitors. He adds that the regulators will have automated keyword searches looking for anything untoward.
“If the FMA pays you a visit, and what you say you do and what you actually do are one and the same, then that’s fantastic,” says Greenslade.
“But if there is a big disconnect, then that is when they start to drill down because you are effectively being misleading.”
*Most webinars hosted by Financial Advice NZ are available on replay via its members’ site.