The Korea Financial Investment Association recently asked domestic asset management companies to apply in-house advertising review standards strictly. As financial authorities examine business practices such as securities firms' overseas stock investment marketing and strengthen the investor protection stance, the association is seen as having preemptively conveyed an "advertising restraint order" to managers.
According to the financial investment industry on the 4th, the association held a meeting on the 1st with compliance and marketing officials at asset managers and asked for conservative and strict reviews of product advertising. Some securities firms were also said to have attended the session.
After the notice that day, compliance and marketing heads at each company set internal advertising rules conservatively and relayed guidance to their exchange-traded fund (ETF) units and others to refrain from using tangibly incentivizing events and definitive advertising language.
An official at an asset management company said, "After the association's notice, compliance issued a policy to review more strictly internally before launching ads," and added, "There was also a request not to use definitive expressions in product promotions."
Managers have drawn criticism for excessive marketing competition. Last month, Samsung Asset Management faced controversy for allegedly plagiarizing an ETF ad by Mirae Asset Global Investments, and there were also claims that some Telegram channels run by smaller managers posted promotional content for their products in the form of "information provision," raising concerns about investor protection.
The association's guidelines on advertising and promotion require that ads carry both a review-completed notice and an investor caution statement. However, if the medium's structure makes posting the statements difficult—such as radio and other audio media, banners, pop-up ads online, protruding ads, and promotional materials—they may be omitted. Even so, on some online channels like Telegram, posts have appeared without the review-completed notice despite it being possible to include it. Inside and outside the industry, there have been steady calls to supplement the association's review standards to fit the digital environment, alongside strengthening internal compliance at managers.
Amid this, as the Financial Supervisory Service emphasized investor protection responsibilities across the financial investment industry, the association is interpreted as having preemptively urged managers to strengthen internal compliance. At the end of Oct., Lee Chan-jin, the Financial Supervisory Service governor, addressed concerns at a National Assembly audit that promotions by managers through non-face-to-face channels such as social media (SNS) are surging and may harm consumers, saying, "We will prioritize advertising media with high consumer touchpoints for inspections."
The Financial Supervisory Service also plans to review, from this month through Jan. next year, the status of consumer protection related to overseas investments at financial companies. In fact, on the 3rd, the Financial Supervisory Service conducted intensive inspections of overall business practices at Korea Investment & Securities and NH Investment & Securities, including issues with the reliability of overseas investment information and whether marketing activities were excessive.
An official at a small to midsize asset manager said, "There had been no clear association guidance on posts uploaded to some SNS such as Telegram, but this time there was also a notice that revisions to advertising rules related to push alerts and text messages could be reviewed."
However, the association said it has no plans to strengthen or revise its own advertising review rules at this time. An association official said, "Since the financial authorities are closely watching investment advertising, we held the meeting to urge thorough reviews before launching ads."