Financial Advertising Code

Advertising Standards Code

The Principles and Rules set out in the Advertising Standards Code apply to all advertising in all media. When applying the Advertising Standards Code to Financial Advertising, a high standard of social responsibility is required.

Financial Advertising Code

In addition to the Advertising Standards Code, the Financial Advertising Code (the Code) applies to all Financial Advertising.  The purpose of the Code is to ensure that all facets of Financial Advertising are conducted in a manner that demonstrates a high standard of social responsibility.  The Code requires all Financial Advertising to be socially responsible with particular regard to protecting non-expert consumers.  To support this, the high standard of social responsibility applies to all Principles and Rules in the Code.

All Financial Advertising must be legal, decent, honest and truthful and respect the principles of fair competition.  The Advertising Standards Authority (ASA) Codes are a part of the regulatory framework that applies to the advertising of Financial Products or Services.  There are a number of Acts that restrict advertising, and these are enforced by government agencies.  Advertisers must observe the legal restrictions and requirements applicable at the time of advertising, along with any Financial Markets Authority guidance and the Responsible Lending Code.

Attention is drawn to the:

• Financial Markets Conduct Act 2013
• Guidance note: Advertising offers of financial products under the Financial Markets Conduct Act 2013
• Credit Contracts and Consumer Finance Act 2003
• Credit Contracts and Consumer Finance Regulations 2004
• Responsible Lending Code

Application of the Financial Advertising Code

The Code, along with the Advertising Standards Code, applies to all advertising of Financial Products or Services placed in any media, including but not limited to: television (including on-demand television), radio, print, out of home (for example, billboards, bus shelters and buses), cinema, digital, email, websites, social media (including user-generated content), influencers, videos, apps, advergaming, addressed and unaddressed mail, brochures and point-of-sale material.

Ultimately, the responsibility to comply with all aspects of advertising regulation is shared between all the parties to an advertisement, including the advertiser, agencies and media organisations.

The Code is made up of three parts:

• Principles: the standards expected in advertising
• Rules: how the Principles are to be interpreted and applied
• Guidelines: information and examples to explain a Rule

Interpreting the Financial Advertising Code

Social responsibility is embodied in the Principles and Rules of the Code.  In interpreting the Code, emphasis must be placed on compliance with both the spirit and intention of the Code.

It is possible for advertising to be in breach of one or more of the Principles in the Code without being in breach of a specific Rule.

In determining whether a Principle or Rule has been breached, the Complaints Board will have regard to all relevant matters, including:

• generally prevailing community standards;
• previous decisions;
• the consumer takeout from the advertising;
• the context, medium and intended audience; and
• the product or service.

For the avoidance of doubt, where relevant legislation that affects this Code has been updated and if a conflict occurs in relation to legislative and Code requirements, legislative requirements will prevail.

Definitions for the purposes of this Code

Financial Product or Service means any product or service relating to insurance, banking, credit, investment, payment services, financial or risk management, funds management, foreign exchange, or advice or educational services in relation to any of those things, including but not limited to:

• All insurance products, services and advice, including but not limited to:
  • Life insurance
  • Health insurance
  • Income protection insurance
  • Insurance for homes and contents, vehicles and other things you own
  • Liability insurance
  • Travel insurance
  • Pet insurance
  • Funeral insurance

• All banking, debt or credit products and services and advice, including but not limited to:
  • Mortgages (including reverse mortgages) and other loans
  • Credit cards, payday lenders and other registered or unregistered lending or credit services or facilities
  • Buy now, pay later (BNPL) products
  • Deposits and bank accounts, including term deposits and other monetary investments
  • Debt management and debt consolidation products, services and advice

• All investments products, services and advice, including but not limited to:
  • Share investments
  • Managed funds, including KiwiSaver funds
  • Services offered by non-bank deposit takers
  • Discretionary Investment Management Services (DIMS)
  • Real estate investment (properties or schemes)
  • Syndicated investments such as forestry partnerships and property investment
  • Timeshares
• Peer-to-peer investment
• All payment products, services and advice
• All financial or risk-trading or management products, services and advice, including but not limited to:
  • Foreign exchange trading services
  • Share trading platforms
  • Cryptocurrencies
  • Derivatives
  • Binary options
• Financial training or courses directed to consumers, including courses on investments, foreign exchange, derivatives or share trading and wholesale investments, whether conducted by licensed or unlicensed service providers.
• For the avoidance of doubt, a Financial Product or Service includes any product the Financial Market Conduct Act 2013 or Credit Contracts and Consumer Finance Act 2003 or any other legislation defines as a Financial Product or Service.

Financial Advertising means any message, the content of which is controlled directly or indirectly by the Advertiser, expressed in any language and communicated in any medium with the intent to influence the choice, opinion or behaviour of those to whom it is addressed and is for the purpose of promoting a Financial Product or Service.

PRINCIPLE 1: SOCIAL RESPONSIBILITY

Financial Advertising must be prepared and placed with a high standard of social responsibility to consumers and society.

2. Key information must be legible and/or audible with care taken to ensure the level of disclosure is in proportion to the importance of the information. Examples include:

1. 1. 1. 1. Written text must be large enough, clear enough and present long enough to be easily read.
         2. Spoken language must be clear and at a speed able to be understood by consumers.

3. Financial Advertising content posted online or otherwise distributed by individuals or entities who are not licensed financial advice providers (e.g. influencers and other content creators) must also comply with the Principles and Rules in this Code.

Financial advice (for example, recommending particular Financial Products or producing a personalised investment plan) may only be included in Financial Advertising content from those individuals or entities who operate under a licence granted by the Financial Markets Authority.

Advertisers and their agents, including influencers or other content creators, have primary responsibility for ensuring user-generated comments, reviews, testimonials and endorsements comply with the Principles and Rules in this Code when they are part of the advertisement.

1. Obvious untruths, exaggeration, puffery or deliberate hyperbole must not be used in relation to financial claims.

In addition to the Advertising Standards Code, for the Financial Advertising Code.

2. The content of Financial Advertising must not take advantage of consumers’ inexperience, lack of knowledge or financially vulnerable situation.

1. Financial Advertising must not

1. 1. portray unrealistic or exaggerated financial expectations or outcomes; or
   2. provide incomplete information such that the advertising is misleading, e.g. by omitting to include complete information such as the losses, negatives or risk in any investment; or
   3. state or imply that Financial Products or Services are safe or free from risk or understate the level of risk associated with them.

2. Financial Advertising that uses examples of past performance must make it clear this is not a reliable indicator of future performance. Examples of exceptional performance or offers of higher-than-average returns must be clearly identified as such.

3. Technical language and statistics are acceptable in Financial Advertising, provided they are relevant and used in a way easily understood by non-expert consumers without specialist knowledge. Publication of research results must identify the researcher, the reference period and source references.