Web promotions - February 2006
We have seen a growth in firms promoting investment products online and consumers buying investment products online. We expect these firms to apply the same level of vigilance to internet promotions as they do to other media.
Websites themselves may be financial promotions, and if so need to comply with our rules – amongst other requirements they need to provide a message that is clear, fair, not misleading, and should be balanced.
We published our first findings in this area in spring 2005. Recent thematic work has shown similar shortcomings and we are concerned that when firms develop financial promotions for the internet, they are still not considering the points we have already made about the need for promotions to be clear, fair, not misleading and balanced in other media.
We are also concerned that some firms have not considered the particular issues which arise in relation to website promotions. These include, for example, how consumers access information relevant to them from what may be voluminous pages of information on a website, and how key material is brought to consumers' attention. We are pursuing our areas of greatest concern with the firms involved.
What recent work have we done?
We looked at how various investment products were marketed on 34 financial intermediaries’ websites. When reviewing the website promotions we looked for:
- a straightforward and balanced overall impression of the product; and
- a clear indication of the risks and drawbacks.
We restricted this review to financial intermediaries' website promotions for investment products. However, the issues we have identified are likely to be relevant to any firm issuing website financial promotions for investments.
What were the findings from this work?
We noted certain issues, common to several websites, which gave us particular cause for concern. Two key areas were:
- omitting risk warnings altogether; and
- failing to make important information prominent or clear - for example:
- positioning risk information separately from the product-specific information, leaving it for the consumer to link risks with the actual product;
- referring consumers to statements in documents held offline; and/or
- locating key material at the bottom of the screen or using a font size or colour that diminishes the apparent importance of the information.
Next steps
We have identified firms whose websites gave us particular cause for concern, and we are asking these firms to take appropriate and immediate action. We expect all firms to take note of our concerns and pro-actively improve their own material to ensure the website financial promotions provide a message that is clear, fair, not misleading and balanced.
Given the increased risk posed by internet promotions and the concerns identified, we are increasing our monitoring of internet promotions.
