View more on these topics

Ad power to the tower

Consumer groups are calling for the FSA to get the powers to protect the public from misleading advertisements.

Financial services consumer panel chairman Colin Brown says when the Treasury reviews the legislation underpinning the FSA in December it should give more authority to the FSA to police ads.

His main complaint is when the FSA get complaints about ads, it often takes months to investigate the complaint and take action.

The panel says even if the FSA decides the ad is misleading and tells the provider to withdraw the ad, it cannot name and shame the firm. It wants the FSA to have similar powers to the Advertising Standards Authority, which publishes details of misleading ads.

The ASA refuses to comment on the FSA&#39s role, saying it is only interested in its own responsibilities.

Brown also wants the FSA to be encouraged to do more with its authority. He says: “The panel has been trying for a very long time to get the FSA to be tougher with firms and promotions. While the FSA is not entirely free to do what it wants, we do not think it does as much as it can in this respect.”

The call has been echoed by other consumer groups, such as the Consumers&#39 Association and the National Consumer Council as well as leading IFAs.

National Consumer Council spokeswoman Janice Allen says: “We are very pleased that the panel has put this message out as it does look like there are occasions when there are misleading ads to the detriment of consumers.”

Consumers&#39 Association senior policy adviser Mick McAteer says: “There is a general concern about advertising, not only because of past performance but also because it can often be confusing to consumers. The FSA is somewhat hamstrung by the legislation. I do not think it would be fair to blame the FSA for this.”

Syndaxi Financial Planning principal Robert Reid says: “I was not aware that the FSA did anything to protect consumers from misleading advertisements. I certainly have not seen any evidence of them doing anything.”

In January, the FSA did urge consumers to contact it if they felt any ads were misleading. It outlined the action it can take, including “naming or shaming a firm where there have been very serious or persistent breaches of the rules”.

But no one can remember it ever using that authority to name and shame.

The motivating factor behind the FSA&#39s warning was the onset of the Isa season – if there is an Isa season. It said it would be particularly interested in ads for products such as unit trusts, investment trusts and endowments to make sure they are “clear, fair and not misleading.”

A commitment was made that, from next spring, a six-monthly overview summarising the reports received from consumers will be published.

The panel welcomes this action as a step in the right direction but says much more is needed.

However, advertisers think there is already a great deal of sensitivity about falling foul of the FSA and misleading ads are rare. According to one ad agency, the only time that so-called misleading ads become an issue is when the FSA changes its guidance and providers struggle to interpret the changes.

Ad agency CCHM chairman Lucian Camp says: “The FSA has clearly been sharpening its teeth in this area over the last year. I would say the FSA does enough already to crack down on advertising.”

Citigate Albert Frank deputy managing director Phil Hawkins says: “I do not think there is anything wrong with naming and shaming per se but I think the FSA would struggle to find companies to criticise.”

The panel rarely issues public statements of this nature. It responds to consultations on a regular basis and its opinions are often heeded by the regulator but wading in and calling for a legislative review of the FSA is almost unprecedented.

Interestingly, the January warning from the FSA was the first with the new consumer director Anna Bradley&#39s name attached to it, having recently joined the regulator from the NCC.

Some in the industry feel that the panel is more likely to chime with the views of Bradley. But Brown says this notion is “absolute nonsense.”


Allianz revamp spells end of Dresdner brand

The Dresdner RCM Global Investors brand is finally set to disappear in the UK following the fund firm&#39s rebrand as Allianz Dresdner Asset Management. The rebrand comes almost two years after the March 2001 deal which saw Allianz – one of Germany&#39s leading insurers – acquire Dresdner Bank. The various fund management arms of Allianz […]

Fortune Asset Management – Lumen Global Value Fund

Tuesday, 4 February 2003 Type: Hedge fund Aim: Growth by investing in emerging markets Minimum investment: Lump sum $50,000 Place of registration: Cayman Islands Investment split: 100% in emerging markets Charges: Initial up to 5%, annual 1.5% Commission: Subject to negotiation Tel: 020 7355 2000

Insight Investment – Insight Investment Focus Plan

Wednesday, 5 February 2003 Type: Oeic mini or maxi Isa Aim: Income or growth by investing in a choice of six funds Minimum investment: Lump sum £3,000 Catmarked: No Investment choice: Income &#45 equity high income, monthly income, global bond funds. Growth &#45 UK discretionary, UK select opportunities, European discretionary funds Yield: Depends on fund […]

&#39Investors must heed emerging market volatility&#39

The AITC is warning investors to be aware of volatility in investments in emerging markets, stressing the need to take a long-term view. It gives the example of the Eastern European trust, which is the fourth-best-performing investment trust over the last year. Investing £1,000 would have returned £1,170 over 12 months to December 2002 but […]

Artemis Global Income: Making sense of global markets

The rally in cyclical ‘value’ stocks paused for breath in February, as investors took a more cautious tone and switched their attention back to defensive areas. In this article, Jacob de Tusch-Lec, manager of the Artemis Global Income Fund, explains how he has positioned the portfolio, given the many economic, geopolitical and policy risks that […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm