Let us now turn our attention to celebrity advertising/endorsing. A few years back, Sebi took the stance that in case of any financial product regulated by Sebi, celebrity advertising / endorsement is a strict no-no. However, neither the banking regulator nor the insurance regulator has prohibited celebrity endorsements. For instance, a top cricketer models for a bank as well as an insurance company. Film actors have been used in bank advertisements and a film actor has also endorsed an insurance company.
What could lead to a piquant situation is when a financial services group with the same or near identical brand name with presence across financial products, governed by different regulators, resorts to celebrity advertising in the product category where it is permitted. This certainly rubs off, albeit indirectly on the other categories as well wherein it is prohibited. For example, Company A has a bank as well as a mutual fund, both with similar names. Now, the Bank A can advertise using celebrity endorsements, which will certainly have some rub-off effect on the mutual fund as well.
While the products are regulated by different regulators, the user of these products- that is, the retail investor - gets uneven information and therefore cannot make an informed decision when he or she compares products across product categories.
What could lead to a piquant situation is when a financial services group with the same or near identical brand name with presence across financial products, governed by different regulators, resorts to celebrity advertising in the product category where it is permitted. This certainly rubs off, albeit indirectly on the other categories as well wherein it is prohibited. For example, Company A has a bank as well as a mutual fund, both with similar names. Now, the Bank A can advertise using celebrity endorsements, which will certainly have some rub-off effect on the mutual fund as well.
While the products are regulated by different regulators, the user of these products- that is, the retail investor - gets uneven information and therefore cannot make an informed decision when he or she compares products across product categories.
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