The golden rule for all advertising or financial promotions should be the Ronseal test - products need to do exactly what they say on the tin.
This week the Advertising Standards Authority rejected a complaint made by a member of the Financial Services Consumer Panel about a mini-bond advert.
This decision sparked some much needed heated debate in our comments section as to whether the promotions watchdog or consumer advocate was in the right.
A television advert for Wellesley Finance's property mini-bond, broadcast on October 3, 2018, featured a character stating: "If you're not getting much interest on your savings, try the Wellesley way."
The advert included on-screen text stating: "Wellesley Finance PLC is not covered by the Financial Services Compensation Scheme. Capital is at risk. Please seek professional advice. Wellesley Finance PLC lends your money."
The text also stated Wellesley Finance is not authorised or regulated by the FCA, nor is it a bank, nor the mini-bond a savings account.
But a member of the Financial Services Consumer Panel challenged whether the claim, "If you're not getting much interest on your savings, try the Wellesley way" was misleading, because it implied a mini-bond was an alternative to a savings account.
The Advertising Standards Authority rejected the complaint, noting the on-screen text meant the television advert met FCA requirements.
The ASA considered viewers would understand the mini-bond was an investment product that would operate differently and have different risks associated with it than a savings account offered by a high-street bank.
But I think the ASA is assuming a level of financial knowledge that the average man on the street just doesn't have and which leaves me less than convinced that the financial promotions rules as they currently stand are good enough.
I think there is something deeply disturbing that companies that aren't FCA regulated and whose investments lack Financial Ombudsman Service and Financial Services Compensation Scheme protection can push their wares on television.
While Wellesley has followed the rules and therefore the Advertising Standard Authority ruled its advert could continue to be shown, I would question if any unregulated investments should be able to be advertised on television alongside the likes of baked beans and Cadbury's chocolate bars.
Could this positioning make the average, unquestioning television viewer think an unregulated investment was as suitable for the average man on the street as a savings account despite the fact the text in the advert contains warnings?
One of our readers, Stuart Rathbone, argued that the regulator was right to state the advert was fine as all the risks were explained in text that appeared on-screen.
Mr Rathbone said: "The ad spells out the headline risks and the possible need to seek professional advice, so if you don't, you're on your own. No good crying to mummy if it goes belly up."
