Don’t Take Financial Advice From Ads

The writer is a Delhi, India based Certified Financial Planner CFPCM, conferred upon by the
Financial Planning Standards Board. If you are an Indian resident looking for a financial plan prepared according to your needs & goals, write to her at shruti(AT)

There is a famous saying “Advice is like mushrooms. The wrong kind can prove fatal“. When it comes to your hard-earned money, bad advice has an effect both now and for the rest of your life.

Sadly, a large number of people become victims of such wrong financial advice regularly, by just watching or hearing financial product commercials on television and radio. Funny right? Who would have thought that these two harmless daily relaxation activities can be dangerous for your hard-earned money and future? 

You must understand that financial products are different from consumer goods. If you spend your money on a pair of shoes or any perishable items after watching a promising advertisement of the same, and it turns out to be a wrong decision, you might feel bad and sad for some time but eventually you will forget about it. On the other hand, buying the wrong financial product will impact you for the rest of your life.

Since most people are intimidated by personal finance, to begin with, they fall prey to such commercials easily. The majority of them assume that the suggestions they hear on these ads are valid and treat them as readily available solutions to their money problems. Consumers believe that they’re doing something to improve their finances, but in reality, they are doing the exact opposite.

For example: If someone buys a LIC endowment or money back life insurance plan instead of term insurance after watching ever-increasing ads of the same, then he/she is making the critical mistake of mixing insurance and investment and as a result, fail in both goals drastically.

On another hand if someone buys 1 crore term insurance after watching another proper commercial of Policy Bazaar, they might end up being over or underinsured, because they didn’t find out how much insurance cover they actually need, they just opted for 1 crore term as advised in the advertisement.

These are just some of the examples, there are plenty more where they came from.

Financial product commercials are mostly oversimplified and misleading. The financial advice you see on television or hear on the radio are generalized and pitched out for a mass audience, they are not taking into consideration your situation or risk-taking ability into the picture.  They downplay the risk of market-linked investments for people with low financial literacy.

It is not that all these products promoted in such ads are intrinsically bad. What is wrong is that the target audience assumes them to be true and best for them, without any research or comparison of other products.

All advice from such ads must be received with cautious reserve, one must not follow it blindly.

Therefore, don’t take money advice from any advertisements. Always do your research. It might seem simple enough to follow, but all such commercials exist for one reason only – to make money for the advertiser.

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