The Financial Advertising Code came into effect for new ads on 1 March 2022, and comes into effect for all ads on 1 June 2022.
Available to view:
A pdf version of the new Financial Advertising Code.
The report on the Review of the Code for Financial Advertising and the draft 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:
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:
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:
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:
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.
|Rule 1 (a) Social responsibility||Guidelines|
|Financial Advertising must be easily understood by consumers.||1. Information and claims in Financial Advertising must be easily understood by consumers. All relevant and required information must be disclosed.
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:
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.
PRINCIPLE 2: TRUTHFUL PRESENTATION
Financial Advertising must be truthful, balanced, and must not be misleading.
ADVERTISING STANDARDS CODE – Additional Guidelines for Financial Advertising
|Rule 2 (b) Truthful presentation||Guidelines
See full Guidelines for this Rule in the Advertising Standards Code.
|Financial Advertising must not mislead or be likely to mislead, deceive or confuse consumers, abuse their trust or exploit their lack of knowledge.
Misleading may be by implication, inaccuracy, ambiguity, exaggeration, unrealistic claim, omission, false representation or otherwise.
|Exception to the Advertising Standards Code, for the Financial Advertising Code.
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.
|Rule 2 (c) Use of data||Guidelines
See full Guidelines for this Rule in the Advertising Standards Code.
|Advertisements must not use tests, surveys, research results or quotations from technical and scientific literature in a manner that is misleading or deceptive.||In addition to the Advertising Standards Code, for the Financial Advertising Code.
1. Financial Advertising must not
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.