View more on these topics

FSA thwarts cherrypicking with new data rules for ads

The FSA is imposing rules to standardise the presentation of fund data in a bid to prevent groups cherrypicking favourable time periods when displaying past performance in advertising.

The rules, which were exclusively revealed in their proposed form in Money Marketing last March, insist that past performance is accompanied by a table showing five-year discrete annual returns expressed as a percentage. From June, fund groups must also place less emphasis on past performance and warnings must appear in the main body of an ad rather than being buried in the small print.

Groups with less than five years&#39 performance to present must give information for as many 12-month periods as possible, updated to the previous quarter. But no group may use past performance if they have less than one 12-month period to present as it would breach the FSA&#39s “clear, fair and not misleading” rule. Groups will also be banned from trying to link past performance with future performance.

The FSA says the rules – particularly the use of percentages in tables rather than sums of money – will give consumers a better understanding of the volatility of the investment and how it has performed over a period of time.

Fund firms, which were concerned that past performance would be banned, have welcomed the rules, agreeing that standardised data is the best way to present information to consumers.

FSA spokeswoman Kate Bristowe says: “The new rules will improve the quality and balance of past performance data. They will prevent firms cherrypicking time periods which shows their data in a flattering way.”

Artemis product development & communications director Nick Wells says: “By and large, the rules make sense. We do not have any issues with them. It is good to see that common sense has prevailed.”

Recommended

Net dividend

Last week, I started to look at the seasonal subject of how best to extract funds from a private company with minimum payment to the authorities. I have already looked at the criteria and formalities for payment, including the payment of interim dividends. This week, I would like to look at the more well-known financial […]

Bupa creates new group risk business unit

Bupa has set up a new London based group risk business unit, aimed at moving forward its group risk market. Former Swiss Life group risk business managing director Graham Clark has been appointed director, with 10 former Swiss Life employees recruited to the new commercial management team. Bupa director of sales and distribution Steve Flanagan […]

Personal Touch Insurance receives network status

Personal Touch Insurance has announced it has been granted IFA network status by the FSA and is now moving to set up a network. It describes the move as the “final piece in the jigsaw” of its plans of offer intermediaries access to a “financial supermarket” offering regulated products, including pensions, investments, mortgages and general […]

No crisis says Standard

Standard Life says it is in no financial difficulty and that discussions with the FSA over new solvency requirements are not crisis talks. Responding to newspaper reports that its spare capital is likely to fall to £2.5bn from £6bn under new reporting rules to come in next year, the life office says it expects later […]

Graphic content – December; the countries most exposed to a rise in protectionism

President-elect Trump has suggested withdrawing from the North American Free Trade Agreement (NAFTA) and ending negotiations over the Trans-Pacific Partnership (TPP), albeit there is considerable uncertainty over what he will, or even can, do. If one of the main consequences of the election of Donald Trump is US protectionism, it’s worth considering who stands to […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    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

    Email: customerservices@moneymarketing.com