Carmel Fisher: Don't invest in an advert

There's a reason great ads with exaggerated promises never feature in the financial services industry. Photo / 123RF

I love a good ad. Even when I know I am being blatantly marketed to, and the promised benefits may not eventuate, I've been prepared to buy a product or service on the basis of an engaging ad campaign.

I've bought mascara based on advertisements featuring gorgeous models with eyes you could get lost in. I've bought skin cream on the promise that my laugh lines would disappear in a matter of weeks. And I've been moved to buy kids' toys and games where the ads show unbridled joy and rapture on the faces of adorable children at play.

But I'm not a sucker and I wouldn't let a clever marketing campaign influence me on significant purchases.

I can live with paying $100 only to find I still have wrinkles after a month. I couldn't live so easily knowing I had lost thousands of dollars because marketing promises had not been kept.

There's a reason great ads with exaggerated promises never feature in the financial services industry. Like me, nobody will tolerate deceptive or exaggerated advertising when our wealth or our financial future is involved.

The regulator is onto it and makes sure no entities operating in the financial sector overstate benefits or understate costs.

The problem is, there's marketing and then there's guerilla marketing. There has been evidence of the latter in KiwiSaver lately. I hope nobody gets suckered.

Guerilla marketing is a term used to describe an unconventional advertising approach designed to reach a broad audience at a low cost. It is often used by small businesses or newcomers wanting to stand out, without breaking the bank.

One of the cheapest ways to advertise any product or service is to get the media talking about it. If you can convince the media, you can get in front of thousands of people at no cost. Of course, the media are not PR agents and will not just write about your product or service for the sake of it.

They will, however, write about you if you give them something juicy - the more surprising, shocking or revealing your campaign, the more likely you are to get mass media coverage.

So we've seen numerous articles - some written as straight press releases, with no cross-referencing nor fact-checking - suggesting skulduggery exists in the KiwiSaver industry, with providers ripping members off and deliberately hiding fees.

There's a reason great ads with exaggerated promises never feature in the financial services industry. Like me, nobody will tolerate deceptive or exaggerated advertising when our wealth or our financial future is involved.

So much so that, apparently, once KiwiSaver providers are required to disclose fees, members are going to be so horrified they're going to run for the hills.

News flash: KiwiSaver providers are required to disclose fees fully, the form of disclosure has been dictated by the regulator and the regulator has full oversight of how much is charged and looks to ensure that fees are reasonable.

Then there's the claim that all KiwiSaver providers, bar one, are doing their members out of at least $65,000 over a lifetime. This claim is based on many assumptions; the claimant has no track record of making any money for members; and there's no mention of investment returns which could make far more of a difference to retirement balances over a lifetime than fees will.

But, hey, never let the facts spoil a good story.

Being swayed by marketing in the purchase of beauty products is one thing; with financial products it's quite another.

Waiting a month to see if a product works is easy. Giving it a lifetime and hoping it meets its promises? Hmmm.