If you work in the financial services industry, making sure your promotions meet the requirements of the Financial Conduct Authority (FCA) is a must. Falling below the standards expected by the regulator can lead to complaints and sanctions.
‘Treating customers fairly’ is something the FCA sees as essential, and many of their rules and guidelines are geared towards making sure financial promotions achieve this. Another of their key aims is that financial promotions should be ‘clear, fair and not misleading’.
As part of this, they are strict on ensuring that adverts do not over-state the potential returns of investments, or underplay the risks. Relevant information needs to be included to ensure potential customers can make informed choices about the products and services they buy.
What is ‘prominence’?
You may have heard the word ‘prominence’ mentioned in relation to this. But what does prominence mean in this context, and how can you make sure your financial promotions comply with the rules?
The FCA believes that ‘Prominence of relevant information plays a key role in ensuring that a communication is clear, fair and not misleading’.
By ‘prominence’, the regulator means the size and position of any risk warnings or other important information in adverts and promotions. The FCA has published a Guidance Consultation on Prominence which says that ‘Prominence can be defined as “the state of being easily seen”, i.e. in terms of a statement within a financial promotion, “likely to attract attention, for instance, by virtue of its size or position”.’
What does prominence apply to?
Prominence is relevant to a wide range of features, such as information on interest rates, fees and charges. A full list of promotional features that should comply with prominence guidelines is included in the sourcebook.
Prominence is also not limited to printed materials; it applies to financial promotions online and on television, as well as those via other channels.
The FCA guidance also makes it clear that prominence is not only relevant to risk warnings, but should be taken into account for all information included in financial promotions. There are specific rules for certain products and sectors, such as mortgage promotions and insurance-related pricing claims.
How do we know what best practice looks like?
The FCA includes clear guidance and some good examples of best practice in its Guidance Consultation. This has information on how financial promotions can meet prominence guidelines in terms of style, positioning and content. It also has some useful visual examples of what not to do.
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