FCA launches education campaign targeting inexperienced investors
The Financial Conduct Authority (FCA) has launched an £11 million campaign to provide more education for inexperienced investors following a survey of 1,000 18-40 year-olds which found a majority likened their new short-term investments to gambling.
76% of those surveyed say they are driven by competition with friends and family when it comes to making investments, while 58% say hype on social media and in the news lies behind their investment decisions.
And only 1 in 5 respondents were considering holding their most recent investment for more than a year, with only 8% saying they would hold for more than five years.
The regulator is concerned some investors are dabbling with investments that do not match their risk tolerance, stating one million people in the UK bought a high-risk investment during the pandemic.
Research published by the FCA in June estimates that around 2.3 million adults in the UK now hold cryptoassets, up from around 1.9 million last year, marking a 21% increase.
The new InvestSmart campaign will target new investors and will prompt them to “consider their appetite for risk and to ignore the hype”.
The five-year campaign on social media and online will direct novices to the FCA’s website and will advise them to ask themselves whether they are comfortable with the risk involved, whether the investments are regulated and if they should get financial advice.
The InvestSmart campaign will help “ensure inexperienced investors don’t get played”, says FCA executive director of markets Sarah Pritchard.
“We are seeing more people chasing high returns. But high returns can mean higher risks.”