The Financial Markets Authority (FMA) has ordered the low-fee KiwiSaver provider Simplicity to remove misleading advertising and improve its compliance.
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It related to Simplicity's advertising campaign last year, known as "All Greys", which had a statement that the FMA regarded as unsubstantiated and likely to mislead or deceive investors.
FMA director of investment management Paul Gregory said Simplicity withdrew the campaign promptly, accepted responsibility, and did not try to avoid its responsibility.
"Advertising can strongly influence investors' decision-making, this is why the law states that any claims made in advertising must be substantiated. It is vital that providers ensure their marketing materials are factually accurate and don't mislead."
The offending advertisements included the statement; "get out of the game when you want to, retire with up to 20 per cent more than the average KiwiSaver plan", and encouraged people to switch their KiwiSaver fund to Simplicity.
The FMA said the statement was unsubstantiated and likely to mislead or deceive, with Simplicity's claim that fees would not change over 45 years not reasonable nor explained to consumers.
"The direction holds Simplicity accountable to investors and means we have additional responses available if Simplicity does not make the necessary improvements or fails to comply with the direction order," Gregory said.
"This case sends a signal to the financial services sector that we will continue to use our powers to sanction providers who make misleading claims in their advertising, as set out in our guidance."
Simplicity has been approached for comment.
