Financial advertising can seriously harm your wealth

It’s hard to escape financial advertising. The biggest brands seem to get their name all over the place, from the side of taxi cabs to train station billboards. They sponsor arts and sporting events and take out full-page adverts in newspapers and magazines.

There’s a reason why banks and fund management companies spend so heavily on advertising: it’s actually very effective. Why? Well, people are naturally anxious about money. Many find the idea of the financial markets quite scary. They’re bombarded with information, not least on social media, and they’re confused by all the different options. So they derive comfort and security from large, familiar brands, and they’re especially receptive to simple marketing messages that help them make decisions.

Even if you consider yourself a relatively sophisticated consumer, you may be more susceptible to financial advertising than you think. The reason is that financial advertisers are very clever at exploiting our vulnerabilities and lack of understanding. They also know just the right buttons to press to make us sit up and take notice.

But financial advertising can seriously damage your wealth, so you need to stay on your guard. Here are five ways in particular in which financial advertisers seek to influence investors’ decision-making.

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