FSP ADVERTISING REQUIREMENTS

Section 14 of the GCOC contains details regarding advertising principles, requirements and standards.

DEFINITION OF ADVERTISEMENT has been substituted with a broader definition, in particular to include

“any communication published through any medium and in any form, by itself or together with any other communication…” and therefore any advertisement that intends to create public interest in your business, including “brand awareness” will be covered by the Advertising requirements in the Code. 

“The new requirements, seek to ensure that clients are not subjected to aggressive, misleading, or unwanted marketing and are able to make informed decisions”>

The key changes on advertising requirements as follows;

• KI or Senior Management must have a documented process and procedure to approve advertisements;
• Advertisements must be factually correct, clear, accurate, balanced, and not misleading;
• Advertisement must use plain language;
• Advertisement must not criticize/belittle any financial product, financial service, product supplier or provider;
• FSP must keep records of all advertisements for a period of at least 5 years after publication;
• References to statistics, performance data, achievements/awards must disclose the source and date thereof, and the associate or product supplier who granted the award;
• References to premiums or periodic investment amounts must include the escalation rate/ basis and the period for which a premium is guaranteed;
• Advertisements must indicate all key limitations, exclusions, risks and charges related to the financial product, financial service or related service. If not practically available then it should clearly state where the available information can be found;
• Client must be given the opportunity to demand that he/she does not receive any further advertisements through any of the direct mediums;
• Advertisements that include puffery (exaggerated opinion of quality) must be consistent with the provisions relating to puffery in the Code of Advertising Practice Issued by the Advertising Regulatory Board;
• Endorsements and testimonials must be based on genuine opinion and actual experience;
• Realistic impression must be given of the overall fees, costs and any indirect charges.
  Clients must be in a position to understand exactly what services they are paying for. No loyalty benefit (cash back bonus) should create the impression that it is free;
• No projected benefits may be included in advertisements, if the benefits depend on future unknown investment performance, unless used to demonstrate the benefits of savings in general.

At INF Risk Management we will assist you with an Advertising Policy and Procedure together with an Advertising Approval form ensuring that advertisements are compliant with the Amended Code.

-Andrea Venter