Financial services brands may be prevented from advertising the fact they have won industry awards in their marketing, under strict new rules designed to prevent firms from promoting ‘past performance’.
Final guidance published by the Financial Services Authority says promoting award wins, if the award is based on performance, should conform to restrictive rules. Awards based on service are not affected by the guidance.
However, the FSA says firms promoting awards judged on both service and performance, such as where portfolio performance is taken into account as part of the judging criteria, are likely to be affected. “We will look to apply this proportionately,” an FSA spokesman said.
Firms making past performance claims must adhere to strict rules including ensuring any such claims are not the most prominent feature of the marketing communication.
Past performance claims also have to include performance information for the previous five years and a risk warning stating past performance is not a reliable indicator of future results.
Bestinvest senior investment adviser Adrian Lowcock said: “The need for performance figures restricts the ability to use an award in marketing material. I do not know many industries that prevent success and excellence from being congratulated.”
