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.
Ad description
A paid-for Facebook ad published by Simply Invest UK for Vinverum, a wine investment company, seen in June 2024, stated, “Transform Your Portfolio with Fine Wine Investment”. A caption on the post stated, “Delve into the world of fine wine investment with our exclusive guide. Inside, discover: The lucrative advantages of fine wine investment. Expert strategies for crafting a tailored wine portfolio. Proven tips for maximising returns on your fine wine collection. And valuable insights to refine your investment approach. Act now – download your free guide.”
Issue
The ASA challenged whether:
1. the ad was misleading because it failed to illustrate the risks of the investments; and
2. the claim “proven tips for maximising returns on your fine wine collection” was misleading and could be substantiated.
Response
1. Vinverum Ltd said that fine wine was an unregulated product and that they understood that they were not subject to Financial Conduct Authority (FCA) regulations. They said the ad did not refer to specific returns an individual could make and that they simply claimed that wine could be profitable.
Simply Media Manchester Ltd t/a Simply Invest UK acknowledged that the ad could have been clearer. They said that they understood that fine wine was not regulated by the FCA, but considered they had acted responsibly.
2. Vinverum said the purpose of the claim “proven tips for maximising returns on your fine wine collection” was to advise wine investors to consider only investing in the top traded wine brands in the world. They said the Liv-Ex 1000 index, which tracked the price performance of the top 1,000 wine brands traded on the platform, had grown by 285.5% over the last 20 years.Simply Invest UK said that Vinverum were experienced in assisting their clients when investing in fine wine. They said details of the advice Vinverum would typically give was not included in the ad because that was information they would provide exclusively to their clients.
Assessment
1. 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. 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 Vinverum’s services.
The ad stated, “Delve into the world of fine wine investment […] The lucrative advantages of fine wine investment. Expert strategies for crafting a tailored wine portfolio”. However, it contained no text stating that investments were variable and could go down as well as up, or that fine wine investment was unregulated.
Because the ad did not make clear that wine investment was unregulated, and that investments could go down as well as up, we concluded it was misleading.
On that point, the ad breached CAP Code (Edition 12) rules 3.1 and 3.3 (Misleading advertising), 3.9 (Qualification) and 14.4 (Financial products).
2. 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 ASA considered that consumers were likely to interpret the claim “proven tips for maximising returns on your fine wine collection” to mean that the advice they received from Vinverum would allow them to ensure the value of their investments performed optimally. We considered that because Vinverum’s tips were “proven”, and because they related to “maximising returns”, consumers were likely to consider that those investments were likely to substantially increase. We also considered the phrase “lucrative advantages” further added to that impression.
We therefore expected to see robust evidence that demonstrated that the claim could be substantiated, in relation to fine wine investments.
We acknowledged that the Liv-ex Fine Wine 1000 indicated that the 1,000 wines which had been tracked had increased in value by 7% overall within the five-year period captured. However, we also noted that within that timeframe, the overall value of wine had gone down as well as up. For example, the wines had decreased in value by 18.8% in the last two years. We therefore considered that evidence was insufficient to substantiate that investments in fine wine, through “proven” tips, were likely to substantially increase.
Because we had not seen sufficient evidence to support the claim “proven tips for maximising returns on your fine wine collection”, we concluded 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 Vinverum Ltd and Simply Media Manchester Ltd t/a Simply Invest UK 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. Finally, we told them to ensure they held documentary evidence to substantiate their investment claims.
