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How To Money

Avoiding Financial Clickbait Online

If you’ve been watching any money related videos on YouTube recently you will have noticed the same ads keep appearing time after time. Namely, a couple of Australian property spruikers and a massive online brokerage company that’s using a high profile celebrity for their marketing campaigns.

Their appeal may have worn off by now and these ads are may just be something you mute or skip when they appear, but it’s easy when you’re getting started learning about finance, to get pulled into these things and start to go down the rabbit hole.

I’ll admit, many of these ads seem very low budget and scammy, but others may be starting to work their magic on you. When it comes to money there are so many scams around, promoting “investment products” and “training courses” that are not in your best interests at all.

So, with all this noise and potentially dangerous financial products floating around, how do you work out what’s the real deal and what’s too good to be true?

Always do your own research

Okay, so my first step is to always do your own research. If you notice something online that you’re interested in, make sure that you’re doing the following:

  • You’re going and looking at the provider’s website, you’re reading the financial services guide (FSG) and the product disclosure statement (PDS,
  • You’re checking that the product or service is licensed with an Australian legal body like ASIC or APRA.
  • You’re having a look online to see feedback from other clients.
  • You’re having a look at the staff and the board to see who they’ve worked for previously and what their qualifications are.

Essentially, you’re running the product or service through a range of steps, to try and make sure it ’s a legitimate offering.

Is it too good to be true?

The next thing I check is whether the company is promising returns that are out of this world. Often we can get really excited about the prospect of making money when it comes to financial products and services, and the ads are directly targeted to our emotions.

Many of these advertisements are promising returns or results that are just too good to be true.

I might also have a look at the Vanguard asset class charts to establish what different asset classes have done in the past, and remind myself of the realistic average returns they’ve had over the last five decades.

If the company is promising to double your money in the next two years on a certain investment and you’ve seen that the asset class traditionally goes up 9% per year on average (over 50 your time), then maybe what they’re promising is just a bit too good to be true.

Think critically

There’s a lot of money in marketing financial products and services, both in Australia and internationally, so it’s always good to have a critical look at anything you see online before you dive straight in. There’s a lot more to lose if you give a substantial portion of your savings to a company you found online that turns out to be a scam, then buying a five dollar fidget spinner from an Instagram ad and it turning up broken.

So next time you see an advertisement online, think a little bit more critically about whether what they’re selling or promoting is too good to be true and what they’re getting out of it (because ads are definitely not free)!

Kate — HTM Editor & Host

If you’re interested in learning more about money and personal finance, catch us on the How To Money podcast which you can find on iTunes, Spotify or via our online web-player.

Follow us on Twitter @HowToMoneyAUS, and on Medium at How To Money Australia.

Important Information

The information on this blog and website is of a general and educational nature only. It does not account for your individual financial situation, objectives or needs. You should consider your own financial position and requirements before making a decision, as we are not an advisory service. We recommend you consult a licensed financial adviser to assist you. The information is based on assumptions or market conditions which can change without notice, and this will impact the accuracy of the information provided. This website and blog occasionally provide links to third-party sites, aimed at helping you gather the information required to make an informed decision — we may receive payment for these referrals.

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How To Money Australia

How To Money Australia

Our mission is to get young Australians talking about personal finance, and give them the resources to guide them in their financial education journey.