Background
In March 2022, the Financial Markets Authority (FMA) directed Simplicity NZ Limited to remove and remediate advertising materials that breached the fair dealing provisions of the Financial Markets Conduct Act 2013 (FMC Act). The direction related to Simplicity’s “All Greys” advertising campaign, which ran between August and October 2021 across multiple media channels, including television, digital platforms, billboards, and Simplicity’s website.
The campaign prominently featured the claim that consumers could “retire with up to 20% more than the average KiwiSaver plan” by switching to Simplicity. Following a review, the FMA concluded that this statement was unsubstantiated and likely to mislead or deceive consumers, as it implied a level of retirement outcome certainty that was not supported by reasonable evidence.
The FMA’s determination was based on two key findings. First, the “up to 20% better off” claim relied on modelling assumptions that the FMA considered unreasonable, including the assumption that KiwiSaver fee differentials would remain unchanged over a 45‑year period, and that all other variables (such as investment returns) would remain equal. Given significant historical changes in KiwiSaver fees and market conditions, these assumptions were assessed as unrealistic.
Second, the assumptions underpinning the claim were not prominently disclosed in the advertising materials. As a result, consumers were not provided with sufficient information to understand, assess, or challenge the basis of the claim, even if they were aware that assumptions existed. This lack of transparency materially increased the risk of consumer misunderstanding.
As a result of these findings, the FMA directed Simplicity to remove the non‑compliant advertising and to ensure that future advertising complies with fair dealing obligations, particularly in relation to substantiation and disclosure of assumptions. The case reinforces regulatory expectations that performance or outcome‑based claims in financial services advertising must be robustly supported, clearly explained, and not presented in a way that overstates certainty or benefit.
