FMA Direction on the All Greys
On 9 March, the Financial Markets Authority (FMA) issued us with a direction relating to our All Greys advertisement campaign which we ran August - October 2021.
The FMA considered that claims in the campaign were misleading, deceptive and unsubstantiated, contravening sections 19 and 23 of the Financial Markets Conduct Act.
It was most concerned about the statement "get out of the game when you want to, retire with up to 20% more than the average KiwiSaver Plan”. The FMA considers that this may have led you to believe that you would be 20% better off in retirement by joining Simplicity.
While we don’t think the ad says people would be 20% better off (and that certainly wasn’t our intention), we agree that it’s possible the advertisement could be interpreted that way. So the FMA were right to call us on this.
The FMA has a responsibility to act in the best interests of investors and KiwiSaver members, as do we. We we own it, have and will do everything the FMA asks, and have changed our approval procedures for advertisements.
Low fees are a key part of what we do, and we sincerely believe that they really matter in achieving higher returns for members over time. The Government does too, which is presumably why they so heavily weighted fees in their selection criteria when choosing KiwiSaver default providers.
As a not for profit, we choose the best ways we can to achieve higher member returns, and low fees are a big part of that. But they are one of several things that will impact long term returns, and the FMA were correct is saying we did not outline the assumptions we made in our advertisements well enough.
At the FMA’s request, we will stop projecting the future impact of low fees via our Simplicity Difference calculator, and will focus only on immediate fee savings, as reported on Government databases. The same data is available on the Sorted website, where you can compare our fees with those of other managers.
If you'd like any further information, please contact us at firstname.lastname@example.org.
Managing Director - Simplicity