A week or two ago I saw a television advert for personal loans by Standard Bank. The premise of the advertisement is that the main character’s wife is invited by a friend to visit them in Switzerland. The gentleman tells the audience about how he went to the bank and received a personal loan to fund the trip. The ad finishes with pictures of the family playing in the snow.
This really irks me:
Since when is it good financial advice to take out a personal loan to go on holiday?
I understand that banks are in the business of providing loans, however, this advertisement just felt a little irresponsible to me. Debt levels here in South Africa are at record levels. Do we really have to encourage people to take out personal loans for luxuries?
What I’m particularly concerned about is the endorsement effect of this advertisement. Someone who is not financially savvy may think it is okay to take out a loan every time they need to go on holiday, because “the respected bank” says so.
How are the banks making sure that clients who walk into the bank don’t blur the line between “financial adviser” and “consultant”? Financial Adviser implies some fiduciary duty, for me. They are in a position of trust and should keep the client’s best interests at heart. A “consultant” gets a bonus when they close a loan. Since banks provide both the services of financial planning and loans, I don’t think enough is done to highlight this important distinction and the inherent conflicts of interest involved.
We should be encouraging a culture of responsible saving for big-ticket items, not finding someone to give us a loan every time we want to buy something.
This advertising angle of Standard Bank’s, for me, is not AYOBA!