The FSA has come under fire over advertising in financial services after a study suggested standards have not improved in the last two years. The Financial Services Consumer Panel (FSCP) says more than four in every ten investment and mortgage advertisements (42%) flout the regulator’s rules.
However, it says virtually the same number (43%) were also non-compliant in the equivalent study in 2006, bar a slight improvement in the mortgage arena, suggesting standards have been stagnant.
The FSCP says the FSA should publish details of promotions and adverts that do not reach the standard as soon as they are identified, as already happens with broadcast financial services advertising through OFCOM and the Advertising Standards Authority.
Adam Phillips, FSCP acting chairman, says: “We undertook similar research two years ago and found over 50% of ads did not come up to FSA standards.
“Since then, the FSA has increased its resources, but with the exception of insurance advertising, things have not improved.
“The FSA needs to do more publicly in this area and be true to its principle of being an open and transparent regulator. Then firms will be able to see clearly where the standards are set.”
Despite apparent failings in the investments and mortgage markets, the Panel’s research found a significant improvement in the general insurance (GI) sector.
The study involved a review of financial promotions in national newspapers published on 15 February, together with two regional daily papers from the Yorkshire area and two local papers in London.
In total, 226 financial promotions were published. The FSCP says that while 33% of financial promotions reviewed did not comply compared with 57% in 2006, the figures were skewed by the GI results.
Filed under: Financial, Mortgage News, Regulation
