Advertising watchdog bans whiskey investment ads – what does it mean?
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The Advertising Standards Authority has banned some Facebook adverts for investments in whiskey this week.
Earlier this week, the watchdog said it had investigated paid for Facebook adverts for Whiskey & Wealth Club and the firm’s subsequent landing page, which said “Investors can expect an average return of 8-18% per annum… High return option: 55% per annum projected return”.
The ASA received two complaints relating to the claims made in the ads arguing they were misleading, which the company denied, but the watchdog upheld the claims and has banned the ads.
It agreed the ads breached the advertising code, saying the company did not explain that the fee charged when investors sold casks back would affect their returns.
Whisky & Wealth Club said: “The ASA reviewed the underlying client data provided, and the ruling does not dispute the validity of those outcomes. We updated our marketing processes immediately to ensure full compliance with the CAP Code and remain committed to transparency for all our clients.”
Our view
The ASA’s ruling hinged on technical wording and how the information was presented in the advert, but the case raises wider questions about investment ads, and serves as a reminder that investors need to dig deeper than surface-level claims.
Past investment performance cannot guarantee future returns, so while it’s good to know how investments have performed to-date, it cannot be used as justification to prove the investment will do well in future.
Make sure you fully understand the risks associated with anything you invest in and are comfortable with the level of risk you’re taking.
Investment advert ‘red flags’
If you see an advert for an investment, there are a few ‘tells’ that suggest it may be misleading or not legitimate.
1. Guaranteed high returns. No one can guarantee investment returns, so this should raise alarm bells.
2. Pressure to act NOW. A legitimate firm shouldn’t be pushing you into investing. Don’t feel pressure to do anything.
3. Unsolicited contact. If a company reaches out to you, either via email or by cold-calling, that should be a warning.
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