We recently conducted a survey among 2,000 YouGov savers and investors to gain insight into attitudes to online financial advertisements.
Social media influencers are the least trusted financial advertisers
Fortunately, social media influencers are the least trusted to advertise financial products, and only 3% of respondents say they trusted them. This is a relief because the majority of people on social media have no idea of complex financial products and most are still Instagram scammers.
It was refreshing to note that when The Sunday Times Influencer List 2019 was released. No one was involved with finances, and they were not unknowingly misled to promote investment scams.
That does not mean that everyone on social media is a fraud. When we interviewed Raoul Pal, CEO of Real Vision, he recommended the FinTwit list as a great source of trade ideas and macroeconomic commentary.
Regulated comparison sites are the most trusted source of online financial advertisements
Most importantly, regulated comparison sites are the most trusted source of financial advertisements. As 45% of respondents said they relied on financial advertisements on comparison sites regulated by FCA.
However, if a comparison site is not regulated by the FCA, that percentage drops to 4%, only slightly higher than social media influencers. Not surprisingly actually, unscrupulous comparison sites that act as marketing agents for scammers who promise high returns for fake investment programs. We discussed this when we looked at bond cams and how investors were misled into thinking that they could achieve a return of up to 13% with mini bonds.
I suppose this is because, if you are regulated, you must behave correctly, have the relevant risk warnings and run the risk of being fined, banned or generally ticked. That is, except shameful, not good for business.
To be regulated, a lot of due diligence is performed by third parties. Regardless of whether you are an appointed representative of another regulated company, or have direct regulations, this means that qualified compliance officers have initially and permanently investigated your company.
Regulation is of course not infallible, because unreliable companies can still get through being regulated offshore and subsequently implementing that regulation. As many do, for example, from Cyprus, where it is much easier to be regulated.
Financial ads on search engines are trusted by only 9% of respondents.
This makes sense. It is so easy to set up an AdWords account and start advertising for specific keywords and searches.
Not surprising, because 43% of respondents claimed to have seen a scam ad online. Google has banned cryptocurrency ads, but ads are still sliding around the net.
Scam advertisements seem to be remarkably effective because between 11-18% said they clicked on a scam ad, either out of curiosity or because they didn't realize it was a scam.
Worryingly, only 20% of people said that when they saw a scam ad, they had reported it to the ad network with the & # 39; Report Ad & # 39; feature.
Articles in the national press and financial promotions only 15% trusted
Not surprisingly, with one click on the button anyone who can advertise on Google via Adwords can also advertise on newspaper websites.
But what worries us about this is the distinction between journalism and advertising. For example, if a journalist or news feed displays an article or advertorial stating how great something is, I think you'll believe it sooner. Especially since large media networks have been misled in the past to unknowingly promote investment scams.
Questions we have asked and answers:
Do you rely on financial online advertisements?
On which of the following online platforms would you trust a financial advertisement (for example, advertisements for bank accounts, investing and trading, etc.)? (Please select everything that applies)
|Media platform||Percentage that it trusts|
|Search engines (e.g. Google, Bing, etc.)||9%|
|Social media influencers (eg People on Facebook, Instagram with a large number of friends / followers etc.)||3%|
|National press (eg Articles online at DailyMail.co.uk, TheTimes.co.uk etc.)||15%|
|FCA (Financial Conduct Authority) regulated comparison sites||45%|
|Comparison sites not regulated by FCA (Financial Conduct Authority)||4%|
We also asked about attitudes towards scam advertisements and what people do about it.
For the next question, consider EVERY type of ad you have ever seen online … Which of the following things have you ever done? (Select everything that applies) See less
|Have you ever:||Percentage that had:|
|I thought an advertisement I had seen online was a scam||43%|
|Clicked on an advertisement that I thought was out of curiosity||11%|
|Clicked on an advertisement without realizing it was a scam||18%|
|Clicked on the & # 39; report ad & # 39; of an advertisement that I thought was a scam||20%|
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