Celebrity endorsements are increasingly common in today’s digital age. We often see companies use celebrities to promote a product, service or help raise awareness for an event or special cause. Increasingly, some celebrities are endorsing investments or products marketed as investments. As an investor, it’s important to ask yourself whether an investment product or service really fits your financial goals and whether the person selling the investment is registered to do so. Remember, making an investing decision based solely on a celebrity endorsement is extremely risky. In many cases the endorsed investment may actually be a scam.
Why do companies use celebrity endorsements?
Companies hope a celebrity’s fame and recognition will entice you to buy their product or service.
A celebrity could be anyone famous – an athlete, an actor, a singer or even a YouTube personality. You may already know of celebrities that endorse investment products on social media, online ads or television. Sometimes, a celebrity’s image or likeliness is used in an endorsement without their permission.
The OSC has previously warned investors about advertisements mentioning or using images of Kevin O’Leary to promote “get rich” schemes using certain binary options trading software and platforms. Representatives of Kevin O’Leary confirmed that he did not approve the use of his image in any advertisements or news articles involving binary optionsOptions An investment that gives you the right to buy or sell it at a set price by a set date. The buy right is termed a “call” option, and the sell right is termed a “put” option. You buy options on a stock exchange.+ read full definition, and that he is not promoting or otherwise associated with any binary options trading software or platforms. Learn more about this Investor Alert.
Does a celebrity endorsement mean it’s a “good” investment?
A celebrity endorsement does not mean guaranteed investmentInvestment An item of value you buy to get income or to grow in value.+ read full definition returns as all investments have risks associated with them. As with any investment, research the company and product before making a decision. Get as much information as possible. Focus on deciding whether the investment is right for your investing goals, not the fame and excitement surrounding the celebrity.
3 things you can do to keep your money safe
1. Find out if they are registered
In Ontario, any business or person selling investments or giving investment advice must be registered with the Ontario Securities CommissionOntario Securities Commission An independent Crown corporation that is responsible for regulating the capital markets in Ontario. Its mandate is to provide protection to investors from unfair, improper or fraudulent practices and to foster confidence in fair and efficient capital markets.+ read full definition. RegistrationRegistration A requirement for any person or company trading investments or providing advice in Canada. Securities industry professionals are required to register with the securities regulator in each province or territory where they do business.+ read full definition helps protect you from unqualified investment professionals. Visit CheckBeforeYouInvest.ca for more information and to check the registration of a business or person.
2. Get unbiased information from a trusted source
GetSmarterAboutMoney.ca has unbiased information on investing. Our free resources and tools can help you get started with investing and financial planning. We also offer tips on how to recognize and avoid investment fraud.
3. Contact us if you still have questions or suspect fraud
The OSCOSC See Ontario Securities Commission.+ read full definition Inquiries and Contact Centre is available to answer your questions about investing, or any concerns or complaints you have about celebrity endorsements and investments. If you suspect fraud, contact us immediately. Call us toll-free at 1-877-785-1555 or email us at email@example.com.