FxPro UK ASA Bloomberg Advertisement Ruling has taken place in relation to one of the FxPro ads featured on the Bloomberg TV channel. What do we know?
18 May, AtoZForex – The Advertising Standards Authority (ASA) of the UK has ordered FxPro to amend one of its latest TV advertisements. The ASA is the independent UK regulator of advertisement.
FxPro UK ASA Bloomberg Advertisement Ruling
The advertising regulator of the UK has published its verdict in relation to one of the online advertisements of the FxPro. FxPro is the broker that provides contracts for difference (CFDs), operates online.
The broker has featured one of its advertisements via Bloomberg TV channel on the 29th of September, 2016. The announcement by ASA is describing the ad in details:
‘The ad began with a scene that featured a young adult who woke up and immediately reached for a tablet device. The image on the tablet showed a falling Euro: GBP currency rate. The voice-over stated, “What can I say, I am a risk seeker. For me, trading is about being in the moment.” The ad then showed the actor arriving at what appeared to be a college setting where he checked the currency status. The image on the device indicated that the exchange rate had risen.
The voice-over stated, “Surfing that wave for as long as it holds. And when the price changes direction, I go back in and profit on the way down. Some say it’s too risky. For me, it’s a thrill. Fortune favors the brave, right?” The ad then featured the actor who showed the currency rate to several other students.’
FxPro UK ASA Bloomberg Advertisement Ruling noted that the text on the screen has been stating 'FxPro Trade Forex Like a Pro … Risk Warning: Trading CFDs involves significant risk of loss”.
Despite the fact that the advertisement clearly warns about the riskiness of the CFDs trading, the ASA has received a complaint in regards to the ad. The complaint has been claiming that the ad is believed to encourage young adults to trade complex, high-risk financial products.
Bloomberg and FxPro response to the complaint
After the ASA has contacted the broadcaster and the Broker itself, the Bloomberg Media responded on behalf of themselves and FxPro. The company stated that the ad was aiming to reach the only specialist audience, since it is displayed via Bloomberg TV channel.
The firm also highlights that the channel is an established financial channel, and thus was targeting only experienced individuals. The response of the company comprised the following, according to the ASA:
‘The channel included ads for products available only to consumers who had demonstrated, through an appropriate pre-vetting procedure, that they had relevant financial trading experience and that any consumer who had not passed the pre-vetting process would not be accepted as a potential client.’
Furthermore, the Bloomberg Media has explained that a risk warning appeared in the ad. Moreover, there was another risk warning that stated:
“CFDs are complex financial products that are traded on margin. Trading CFDs carries a high level of risk since leverage can work both to your advantage and disadvantage. CFDs may not be suitable for all investors because you may lose all your invested capital. You should not risk more that you are prepared to lose.
Before deciding to trade, you need to ensure that you understand the risks involved taking into account your investment objectives and level of experience. Past performance of CFDs is not a reliable indicator of future results”.
The broadcaster has stopped the advertisement operation pending the outcome of the ASA investigation.
ASA FxPro advertisement verdict
The ASA has noted that the ad has appeared on a special financial TV channel. Also, that it is related to a complex investment product. The regulatory body also states:
‘We considered that because of the nature of the channel, some viewers would have a high degree of knowledge regarding CFDs. Moreover, they would understand that there would be substantial risk associated with the product.’
The ASA further mentions that the ad features a young adult that has checked the status of his investment first thing in the morning. Then, the ad presented him in different scenarios, while he was constantly checking on his investment updates. The final scene features him showing the result of his investment to friends.
Considering the above mentioned the ASA stated that the ad might be appealing to a younger student, who might be inexperienced in trading CFDs. Moreover, the regulator considered the voice-over such as “What can I say, I am a risk seeker”, “I go back in and profit on the way down” and “Some say it’s too risky. For me, it’s a thrill. Fortune favors the brave, right?” as calling for risk taking. What is more, the ASA stated that the risk disclaimer of the ad has appeared just briefly.
Ultimately, the regulator has concluded that ‘regardless of any pre-vetting of potential clients the ad was irresponsible and that it breached the Code.’
The ASA has ordered FxPrp to amend the advertisement. FxPro UK ASA Bloomberg Advertisement Ruling pointed out that the broker should not place any emphasis on the benefits of investing in high-risk products in future. FxPro declined to comment on the case.
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