Background
This Ruling forms part of a wider piece of work on unregulated investments, identified for investigation following intelligence gathered by the ASA. See also related rulings published on 13 November 2024.
Summary of Council decision:
Three issues were investigated, all of which were Upheld.
Ad description
A paid-for Facebook ad for Cult & Boutique, a wine investment company, seen in June 2024, featured an image of a wine cellar. Text on the image stated, “Target returns of 12% per year…FINE WINE INVESTMENT. Download our free 2024 market guide.” A caption on the post stated, “As an investment, fine wine has delivered an annualized return of 13.6% over the last 15 years. Download our free 2024 guide to wine investment to see how this compares to other alternatives.”
Issue
The ASA challenged whether the ad was misleading because:
1. it failed to illustrate the risks of the investments; and
2. it did not make clear that past performance was not representative and did not necessarily give a guide for the future.
3. The ASA further challenged whether the claim “fine wine has delivered an annualized return of 13.6% over the last 15 years” was misleading and could be substantiated.
Response
1. Cult & Boutique (Wine Management) Ltd (Cult & Boutique) acknowledged that the ad did not explicitly state that investments could go down as well as up or that the product was unregulated. They said a downloadable guidebook, which was accessible via a link on the website, did make clear that the value of wine could go down as well as up, and that it was an unregulated product. They also said that this was stated in the footer on their website. Cult & Boutique said they would ensure all future ads contained that information.
2. They said the downloadable guidebook to which the website linked also made clear that future performance may differ from past performance. They acknowledged that the ad itself did not contain that information.
3. Cult & Boutique said they could only find a statistic published on the Liv-ex website to substantiate their claim that fine wine had delivered an annualized return of 13.6% over the last 15 years. They acknowledged this record alone was not sufficient evidence and said they would not use that statistic in future ads. They said they would ensure that all future ads that included performance figures would be supported by evidence.
Assessment
1. & 2. Upheld
The CAP Code required that marketing communications for investments made clear that the value of investments was variable and, unless guaranteed, could go down as well as up, and that past performance or experience did not necessarily give a guide for the future. The CAP Code further stated that material information should not be omitted and should be presented clearly.
The ASA understood that wine investment was currently not regulated in the UK, nor was it subject to the protections afforded by the Financial Services Compensation Scheme or the Financial Ombudsman Service. We considered that this was material information that consumers required in order to make informed decisions about Cult & Boutique’s services.
The ad stated, “Download our free 2024 guide to wine investment to see how this compares to other alternatives”. However, it contained no text stating that investments were variable and could go down as well as up, or that fine wine investment was an unregulated market. The ad further stated, “Target returns of 12% per year” and “As an investment, fine wine has delivered an annualized return of 13.6% over the last 15 years”. Therefore, the ad referred to the previous performance of fine wine and we considered the implication from the ad was that it was likely to perform in the same way in the future. We noted, however, that the ad contained no information to explain that past performance was not a guide for the future.
We acknowledged that the downloadable guidebook and the footer of the website stated that the value of wine could go down as well as up and that wine investment was an unregulated market. In addition, the guidebook also stated that future performance may differ from past performance. However, that information was either in small print at the bottom of the website’s landing page or within the guidebook, which had to be accessed by clicking on a link also at the bottom of the website. We considered that information was therefore not presented immediately and clearly to consumers.
Because the ad, and landing page, did not immediately make clear that wine investment was unregulated, that investments could go down as well as up, or that past performance did not necessarily give a guide for the future, we concluded it was misleading.
On those points, the ad breached CAP Code (Edition 12) rules 3.1 and 3.3 (Misleading advertising), 3.9 (Qualification) and 14.4 and 14.5 (Financial products).
3.Upheld
The CAP Code stated that before distributing or submitting a marketing communication for publication, marketers must hold documentary evidence to prove claims that consumers were likely to regard as objective and that were capable of objective substantiation.The ad stated, “fine wine has delivered an annualized return of 13.6% over the last 15 years”. We considered that consumers would expect Cult & Boutique to hold robust evidence to support that objective claim.Cult & Boutique stated they had quoted a statistic published on the Liv-Ex website, which we understood was a global marketplace for tracking the prices of wines. However, they did not provide data to support the accuracy of that statistic or provide any further information to support the claim. We therefore considered we had not received sufficient evidence to support the claim and concluded that it had not been substantiated.
On that point, the ad breached CAP Code (Edition 12) rules 3.1 (Misleading advertising) and 3.7 (Substantiation).
Action
The ad must not appear again in the form complained of. We told Cult & Boutique (Wine Management) Ltd to ensure that future ads made sufficiently clear that wine investment was unregulated and that the value of investments was variable and could go down as well as up. We also told them to make clear that examples of past performance or experience were not necessarily a guide to the future. Finally, we told them to ensure they held documentary evidence to substantiate their investment claims.
