Financial Supervisory Service Releases ETF Advertising Review Results
The Financial Supervisory Service (FSS) has released the results of its inspection of advertising and social media content in the rapidly growing Exchange-Traded Fund (ETF) market. The investigation revealed that some financial companies have been overstating the safety of ETFs, comparing them to bank deposits. However, it was pointed out that ETFs can incur losses depending on market conditions and are not covered by the Depositor Protection Act, highlighting the importance of accurate information delivery to investors.
The FSS particularly highlighted the problem of ETFs sensitive to foreign exchange fluctuations and cases where short-term returns were overly emphasized, warning that incomplete information could cause confusion among investors. The FSS emphasized that as long as these advertisements exist, ongoing supervision and voluntary correction are necessary to foster a healthy investment environment.
Investors are advised to fully understand the total cost and potential foreign exchange risks when purchasing ETFs. It is suggested that financial companies go beyond merely emphasizing returns in their advertisements and provide objective evaluations and information on additional costs.
Looking ahead, the FSS plans to solve these issues through continuous checks and encourage financial companies to make self-improvements.
Related News
ETF Principal Loss Risk Exists... 'As Safe as Time Deposits' Exaggerated Advertising - Kyunghyang ShinmunDespite ETFs being products where principal can be lost, financial companies have been advertising them as 'as safe as time deposits', leading to an overheated marketing environment. Consequently, financial authorities issued investor cautions. The Financial Supervisory Service stated on the 5th, 'The competition among asset management companies has intensified, and some advertisements and SNS content have been found to be insufficient in terms of investor protection,' warning investors of the potential for ETF principal loss, foreign exchange loss risks, and returns ...
Is an investment of 100 million KRW yielding 1.5 million KRW regularly?… Caution on ETF principal loss tooAs the Exchange-Traded Fund (ETF) market rapidly grows to a scale of 300 trillion KRW, financial companies are advertising products that could lead to principal loss as being as safe as 'term deposits', causing marketing to become overheated. Consequently, the Financial Supervisory Service has issued notices for investors to exercise caution. On the 5th, the Financial Supervisory Service stated, “We confirmed some inadequate advertisements and SNS content due to overheated marketing competition among asset management companies, and investors should be aware of ETF's principal...
"Low Fees, As Safe As Deposits"...FSS Warns on ETF Marketing Competition - Korea Economic Daily"Low Fees, As Safe As Deposits"...FSS Warns on ETF Marketing Competition, Reporter Jin Young-gi, Economy
“Don't be deceived by 'Lowest' or 'First'”…Financial Supervisory Service highlights 5 traps in ETF ads - E-TodayAs the Exchange-Traded Fund (ETF) market rapidly expands, more individual investors are making investment decisions based on advertising or social media promotions. However, the Financial Supervisory Service warns that some promotional content can be misleading and emphasizes 5 areas of caution.
Financial Supervisory Service: “When Watching ETF Ads, Check 5 Key Points Including Investment Risk and Total Fees” - DailyanThe Financial Supervisory Service (FSS) announced on the 5th that core information such as investment risk and total fees must be verified when encountering advertisements for Exchange-Traded Funds (ETFs) or content on social networking services (SNS). The FSS noted that as the ETF market grows rapidly, there are cases where advertisements or online content lack explanations of investment risks or use expressions that may mislead investors. They emphasized the key points investors should be aware of.