Mostly passive investment and KiwiSaver provider, Simplicity, has been hit with a Financial Markets Authority (FMA) order over advertising breaches.
In a statement handed out this morning, the FMA directed Simplicity to cease its ‘All Greys’ advertising campaign that “ suggested its scheme could offer returns “up to 20% more than the average KiwiSaver plan”.
“The FMA considered the statement was unsubstantiated and likely to mislead or deceive under the Financial Markets Conduct Act 2013 (FMC Act),” the release says.
“The advertising campaign appeared on a variety of media channels from August to October 2021, including TV channels, Facebook, YouTube, billboards, internet display banners, and Simplicity’s website. The statement appeared prominently in the materials.”
Paul Gregory, FMA investment management director, said Simplicity had withdrawn the campaign. However, the regulator chose to publicise the order as an example for the industry to comply with the recent FMA advertising guidance.
“The direction holds Simplicity accountable to investors and means we have additional responses available if Simplicity does not make the necessary improvements or fails to comply with the direction order,” Gregory said.
“This case sends a signal to the financial services sector that we will continue to use our powers to sanction providers who make misleading claims in their advertising, as set out in our guidance.”
Among other items, the seven-page FMA order requires Simplicity, headed by Sam Stubbs, to tighten it advertising processes and either “remove the online ‘Simplicity Difference Calculator’ or ensure it is compliant and confirm in a report to the FMA”s
As well, the $4.5 billion provider must ensure “that for the next two years Simplicity’s advertising policy is fully implemented, it regularly ensures current and proposed advertisements are compliant, and its Board receives a report on FMC Act compliance practices at least every six months”.