NEW FSA TASK FORCE TO REVIEW USE OF PAST PERFORMANCE IN ADVERTISING

The Task Force will be chaired by Christine Farnish, Director of Consumer Relations at the FSA, and will include consumer and industry representatives, and marketing experts.

Commenting on the initiative, Christine Farnish said:

There is a wide body of evidence to show that past performance is not, in itself, a useful guide to the future performance of investment funds. We have already indicated that our Comparative Tables, to be launched next year, will not include details of past investment performance.

This new Task Force will advise the FSA on the use of past performance in advertising, in the light of the FSAs responsibilities to ensure that advertisements are fair, clear and not misleading. It follows the FSAs commitment, announced in June this year, to carry out further work on the use of past performance data in advertising and promotional material.

We want to work openly and informally with consumers and other stakeholders to see what avenues we might need to explore, particularly in todays low inflation world, to ensure that the use of historical data does not mislead consumers.

The Task Forces terms of reference will be to assist the FSA in its review of the use of past performance data in the promotion of financial products and services; advise on the scope and content of consumer research, and consider whether a standard approach to past performance advertising would be desirable. The first meeting will be held in November and the Task Force is expected to finish its work by summer 2001.

Notes for editors

1. Membership of the Task Force will include:
   • Christine Farnish (Chair)
   • Roger Cornick, Perpetual
   • John Hylands, Standard Life
   • Peter Lunt, University College London
   • Mick McAteer, Consumers Association
   • David Watts, FS Consumer Panel
   • Janet Walford, Money Management
   • Roger Wisbey, Advertising Standards Authority
   • Marketing Practitioner (to be confirmed)

2. The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; the protection of consumers; and fighting financial crime.

3. The FSA aims to maintain efficient, orderly and clean financial markets and help retail consumers achieve a fair deal.