Celebrities in finance advertisements: Aye or nay?

Celebrities tout the latest smartphone, massage chair or water purifier, and sway decisions on which facial mask, shampoo or perfume to use.

When it comes to beer and soft drinks, both their endorsements and the products are readily guzzled.

After all, who doesn't want to be as cool and on-trend as these actors, singers and social media influencers?

But a type of product which celebrities are recently fronting has raised brows - finance-related products.

From platforms for people to buy unit trusts, cryptocurrency or insurance, a number of finance companies have recently made stars their brand ambassadors. They are moving away from subject matter experts to the shiny set with large social media followings.

The latest endorsement came on March 1, when South Korean singer V, from superstar boy band BTS, was unveiled as the face of SimInvest, an Indonesian platform for investing in stocks and mutual funds.

The 27-year-old was appointed by Indonesian securities company Sinarmas Sekuritas, which owns SimInvest. The deal was brokered by global technology-driven creator and entertainment company Gushcloud International.

In a new commercial in March, beamed on video screens in Central Jakarta and on SimInvest's social media pages, the pop star referred to SimInvest as "my best friend" and said: "Whenever I was lost, my friend was the one to give me the wisest advice... do you want to get to know my friend?" SimInvest x V I My Investment, My Choice

Sinarmas Sekuritas' president commissioner Ferita Lie said in a press release: "V's passion, talent, creativity and energetic personality make him the best representative of SimInvest's services to the younger generation."

The release also noted that the partnership came amid a surge of interest in Korean pop culture among the young, led by pop icons BTS. SimInvest's brand ambassador in 2021 was South Korean actor Hyun Bin.

When contacted, representatives from Gushcloud, which facilitated this latest tie-up, did not answer queries from The Straits Times by press time. South Korean actor Hyun Bin was named as SimInvest's brand ambassador in 2021. PHOTO: SIMINVEST/FACEBOOK

Closer to home, purveyors of financial products have also turned to celeb endorsements.

In June 2022, home-grown financial services company Singlife with Aviva, now just known as Singlife, appointed Singaporean actor Pierre Png as its brand ambassador.

In September 2022, Singapore-headquartered digital wealth platform Endowus enlisted home-grown singer-songwriter Benjamin Kheng as a brand ambassador. Local actress Joanne Peh has also appeared in its advertisements at MRT stations and on social media.

In the Singlife ads, Png can be seen juggling a miniature car, house, dumbbell and family photo.

On video, he says: "Chasing freedom doesn't have to be a juggling act. I believe there is a better way. One where I have access to the right tools. I can take matters into my own hands. All I need is someone who can help me stay the course."

The final scene shows Png's spouse of 19 years, former host-actress Andrea De Cruz, standing by his side, framed against a blue sky.

Chasing financial freedom does not need to be a juggling act.All you need is someone to help you stay the course.Take it from Pierre Png and choose a better way to financial freedom:https://6awp-web.app.link/e/Tqw2KpFP6qb#freedom #abetterwayPosted by Singlife on Thursday, June 23, 2022

Titled The Jugglers, the campaign across radio, television, out-of-home advertising and digital channels aims to raise awareness about how people can live life on their own terms if they take control of their finances with the right tools.

In an e-mail reply to The Straits Times, the 49-year-old media personality says he strongly believes in Singlife's commitment to empowering Singaporeans to achieve financial freedom.

"It has been a privilege to partner Singlife and become an advocate for health and financial wellness, championing an important cause of many Singaporeans." Pierre Png poses with a Singlife with Aviva advertisement featuring him in December 2022. PHOTO: PIERREPNG/INSTAGRAM

But he qualifies that his role as Singlife ambassador should not in any way be construed as financial advice.

"I urge the public to still be diligent in assessing their financial circumstances objectively and speaking with their financial advisers to better understand how they can achieve their financial goals, according to their needs."

In advertisements for digital wealth platform Endowus, the featured celebrities reveal that they, too, are clients.

In one advertisement, singer-songwriter Kheng says: "I have many lofty dreams, and I am also not the most financially literate person."

The 32-year-old adds: "What I love about Endowus is the fact that they are a very trustworthy entity in my life that can help me with financial security, grow my investments."

#OntheMoney: Run a business, make music, film TikTok skits, start a family, take care of his parents - Benjamin Kheng...Posted by Endowus on Friday, September 23, 2022

In another advertisement, actress Peh says that growing up, her parents did not talk about money a lot, but she heard from her mother that they had invested in stocks largely based on hearsay, which resulted in a mixture of gains and losses. Singaporean actress Joanne Peh has appeared in advertisements for Endowus. PHOTO: ENDOWUS/FACEBOOK

Peh, 39, adds: "I am hoping to learn from my parents' mistakes, to take more control in terms of how I invest my money."

When contacted, Kheng and Peh declined to comment. On the Money - Joanne | Endowus

#OntheMoney: From storing money in a biscuit tin to taking control of how she invests - Joanne Peh, Mediacorp darling and entrepreneur, has come a long way in how she manages her money. Learn more about her journey towards financial wellness, and how she hopes to impart the lessons learnt from her parents to her children: https://sg.endow.us/3KSwrLU #Endowus #PersonalFinance #Investing #Investment #Invest #Investor #Finance #FinancialFreedom #Money #Cash #Wealth #OntheMoneyPosted by Endowus on Saturday, April 16, 2022

Cashing in on fame

Internationally, British-Canadian actor Kiefer Sutherland fronted an advertising campaign for multi-asset fintech group Plus500 in 2022, while American rapper Snoop Dogg chimed in on behalf of Swedish fintech firm Klarna in 2019.

In 2021, Hollywood actor Matt Damon made a splash plugging cryptocurrency exchange company Crypto.com.

Experts caution that most celebrities are not financial experts, and potential consumers should do their own due diligence before making decisions on complex investment products with long-term consequences for their financial health.

Nanyang Business School's assistant professor of marketing Charlene Chen says finance companies are obviously tapping celebrities' fame to create awareness of their products.

"Stars put their reputation on the line when endorsing products, so consumers generally trust that these public figures have done their homework and found these products to be legitimate before fronting them," she says.

"Celebrity endorsements thus lend an air of credibility, encouraging consumers to consider investing in certain products which they might otherwise be sceptical of. The well-liked stars are especially persuasive."

If a campaign's goal is merely to reach the masses, especially the younger generation, using a well-known celebrity such as a K-pop idol could work, she adds.

However, if it is aimed at convincing consumers to part with large sums of money, it is important to use a star seen to be a credible source of financial knowledge.

Among the advertisements she has seen, she feels those featuring Sutherland are the most convincing, as he is best known for playing the savvy, powerful and intellectual federal agent Jack Bauer in the television series 24 (2001 to 2014).

"Selecting him to front Plus500, which provides online trading services, makes sense. On the flip side, using celebrities who lack credibility may be potentially counter-productive if prospective customers find the ads gimmicky and dismiss them." More On This Topic Local celebrity Michelle Chong makes police report over fake keto ad Actress Hong Huifang alerts fans to fake ad showing her and daughter

Gaining credence

Associate professor of marketing (education) Seshan Ramaswami, 57, from Singapore Management University (SMU), feels the main issue is trust.

He observes that it is commonplace to see celebrities fronting experiential products, such as shampoo, food and beverages, but financial products and services are credence goods, the qualities of which cannot be observed by the consumers after purchase and whose utility is hard to assess.

"The customer just has to trust such organisations - that a bank will return your deposit, an insurance company will pay out your claim or an investment will pay off - and there is no easy way to gain such credence," he adds.

The relatively painless, if expensive, way of quickly establishing trust is to be endorsed by "highly trustworthy" individuals such as celebrities, he adds.

"Movie stars, sportsmen and singers might not be financial experts, but they have other qualities - such as being a familiar face or having achieved a high level of accomplishment in their fields - to warrant trust among the public, and especially their fans."

Of course, when it comes to endorsements, there are potential risks for both celebrities and institutions.

A financial product that does not deliver can hurt a celebrity's future endorsement potential. Conversely, a scandal linked to the celebrity can ruin a financial brand's reputation by association, he adds.

"This is why a chosen endorser should be vetted very carefully, far more than you would need for a soft drink or smartphone endorsement."

SMU's assistant professor of finance (education) Aurobindo Ghosh, 52, posits that using celebrities to front financial-related products is not new but might become more common, given today's geopoliticial and socio-economic conditions.

The programme director for the Citi Foundation-SMU Financial Literacy Program for Young Adults says: "There is currently a pandemic-fuelled digitalisation boom in the financial sector and rising cost of living. Social media's ubiquity has also resulted in relentless in-your-face advertising. In this context, it is easy for retail investors to believe they, too, can strike it rich."

The reputation of certain celebrities can also lend an air of credibility to the products they endorse, he adds.

For example, the fact that American actor Damon played a mathematics genius in the movie Good Will Hunting (1997), as well as a sharp and skilled agent in the Bourne movie series (2002 to 2016), might encourage non-discerning investors to ignore the risks of cryptocurrency speculation, as they feel assured by the star's on-screen personas.

"Some ads can also be interpreted as allowing a behind-the-scenes look at celebrities, revealing the secret of their success. While the commercials usually do not claim this, it can be erroneously construed that somehow the financial platforms have contributed to the stars' achievements," says Prof Ghosh.

He notes that in 2017, a number of overseas celebrities started publicising initial coin offerings - the cryptocurrency industry's equivalent of an initial public offering - on their social media accounts. This led the US Securities and Exchange Commission to warn investors that investment decisions should not be made "just because someone famous says a product or service is a good investment".

Official position

A spokesman for the Monetary Authority of Singapore (MAS) says that financial institutions are required to ensure that the advertisements concerning investment products are not false or misleading.

The provision of financial advice concerning any investment product is a regulated activity under the Financial Advisers Act.

"Only individuals authorised by their financial institutions as financial advisory representatives can provide advice on investment products," the spokesman adds.

To qualify as a representative, the individual must pass the relevant examinations covering both regulatory and financial product knowledge, among other requirements.

The list of authorised financial advisory representatives is published on the Register of Representatives, which can be found on the MAS website. More On This Topic Kim Kardashian 're-evaluating' Balenciaga ties after controversial ads Joan Mitchell Foundation contends Louis Vuitton ads infringe on painter's copyright

The spokesman says: "Celebrities are not allowed to provide advice on investment products unless they are licensed as financial advisory representatives. They can, however, raise awareness to the public on general matters such as health and finance, share their personal experiences, or publicise the financial institution's branding without discussing specific products or services."

The MAS recommends that consumers not rely on the opinions of influencers or social media celebrities when making financial decisions. If they are interested in learning more about specific investment products, they should approach the financial institutions for advice. They should also do their own research to fully understand the benefits and risks of the products or services being offered.

The Singapore Code of Advertising Practice, administered by the Advertising Standards Authority of Singapore, sets out guidelines for interactive marketing communication and social media, and requires that celebrities and influencers disclose their relationship with the advertiser in a clear and prominent manner.

Responding to queries from ST, Singlife's group head of brand, communications and marketing, Ms Debra Soon, says Png's ambassadorship was thoroughly reviewed with proper governance processes in place and is in full accordance with industry norms, regulations and practices.

Singlife's engagement with Png, she says, is unlike one-off celebrity endorsements frequently seen in the multi-level marketing and cryptocurrency space.

"Singlife chose to work with Pierre on a longer-term, sustained basis as part of a measured approach towards finding a celebrity ambassador that best resonates with the company's mission and values," she says.

This engagement, she adds, does not translate into financial advice or endorsement in any specific securities, products or services, or inducements to invest.

"Pierre's involvement in the brand campaign was conceived purely to help build awareness among Singaporeans to take control of their finances. And to that end, we have been very satisfied with the outcome," she says.

Likewise, Mr Jason Huan, Endowus' chief marketing officer, tells ST that the ambassadors who work with the firm neither endorse specific financial products nor offer financial advice. Rather, they "share their experience of using Endowus as a platform in their journey towards financial wellness". In 2022, Singapore-headquartered digital wealth platform Endowus named home-grown singer-songwriter Benjamin Kheng as one of its brand ambassadors. PHOTO: ENDOWUS

He says: "Working with ambassadors, who are first and foremost clients, has helped us broaden awareness based on the segments and life stages that these ambassadors represent. Our clients come from all walks of life, including young professionals, national athletes, business owners, entrepreneurs and retirees, all of whom are keen to take charge of their financial future."

The firm treats its ambassadors with the same level of care and privacy as it does other clients, he adds.

"As clients, over the course of onboarding onto the platform and eventually investing with us, the Endowus mission is one they come to understand and feel similarly passionate about and want to share with the wider community."

UNSWAYED BY STARDUST

Several clients interviewed, like lawyer Kellyn Lee, 30, say that celeb endorsements - or otherwise - make no difference to their investment decisions.

"I recognise the celebrities and think they contribute to brand awareness. But I do not find them to be a credible source of financial knowledge and personally would not make an investment decision just because a person who is famous or has a large social media following says it is a good investment," she says, adding that she relies on a company's track record and leadership.

Another investor, Mr Chris Chua, 32, who works in the finance industry, is also indifferent about stars as financial product spokesmen.

"While I do listen to and appreciate Benjamin Kheng's songs, my financial go-to sources other than Endowus are finance editorials, or websites such as Seedly and The Woke Salaryman."

In the end, what swayed him to invest was that he was "not getting satisfactory results from another investment platform".

On the use of celebs in advertisements, another client, Mr Darryl Lee, 34, who works in sales, says: "I am not convinced about their credibility as financial experts or people having financial knowledge, as their background is in the media. They are not trained in the financial markets but in presenting positive content for marketing purposes."

The Singaporean, who has invested $5,000 through Endowus, feels the company needs to be more upfront about whether these ambassadorships, or endorsements, are paid.

"There is no transparency around this matter. If consumers believe the celebrities made investments of their own free will when they had been incentivised to do so through receiving some sort of compensation, this can be considered a form of false advertising," he says. More On This Topic Once dying, then a novelty, vinyl is back and thriving TikTok bans political advertising in Thailand.

Source : The Straits Times