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Regulator seeks feedback on financial product ads

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New Zealand’s Financial Markets Authority (FMA) has released for consultation its proposed guidance for advertisements of insurance and other financial products.

FMA says advertising “is an area of concern due to the influence it may have on investor knowledge and behaviour”.

“The regulator regularly engages with issuers and other businesses on the disclosure requirements that apply to regulated offers,” FMA says. “The proposed guidance sets out FMA’s expectations of what good conduct in the advertising of regulated products looks like.”

According to the draft guidance, advertisements must be truthful and accurate; use phrasing and jargon with care; prominently display warnings and disclaimers; clearly disclose fees and costs; and not over-emphasise performance.

The FMA guidance also outlines the range of enforcement options available to address false, misleading, deceptive or confusing behaviour.

The action taken will depend on the severity and level of misconduct. FMA can issue a stop order to prevent financial product issuer from distributing a product disclosure statement or consider civil liability actions through the courts.

The closing date for submissions is February 16.

Click here for the proposed guidance.