- FCA launches £11m campaign to help gullible investors make better decisions
- Watchdog to help nest-egg savers doomed to poorly paid accounts
- Promise of action to prevent investors losing significant savings in high-risk investments
Money Watchdog is launching a huge new campaign today to make us a nation of knowledgeable investors.
The Financial Conduct Authority (FCA) has pledged to reduce the number of savers with nest eggs that are wasted in poorly paid savings accounts.
Also, the regulator has promised to halve the number of investors who can plow money they can’t afford to lose in high-risk investments.
Better Investing: The Financial Conduct Authority says that about 8.6 million of us have more than £10,000 in cash savings accounts that can bring enormous rewards when invested
As part of this, it will launch a £11 million campaign to help gullible investors make better-informed decisions with their money and protect them from loss.
Sarah Pritchard, executive director of markets at FCA, told MoneyMail: ‘Investors have never had more freedom – technology has democratized markets, new products become available, and people have their own life savings more than ever before. in better.
‘But that freedom comes with risk. We want to give consumers more confidence to invest and help them do so safely, understanding the level of risk.
‘We’re not saying investing is right for everyone, but we want those who can benefit to have the confidence to do so.’
The watchdog says that about 8.6 million of us have more than £10,000 in cash savings accounts that can bring enormous rewards when we invest.
F figures from investment firm AJ Bell show that £10,000 saved in a cash account paying 0.5 pc would be worth £11,614 after 30 years.
However, assuming a 5% annual growth, the same amount invested would be worth more than £43,000.
The FCA has also promised to reduce money lost in investment scams that are handled by firms.
Consumers lost £570 million in investment scams in the 2020/21 financial year – three times what was lost in 2018.
Some £1.6 trillion has been invested by consumers through 6,000 wealth managers, advisors and investment platforms.
The value of £10,000 saved in a cash account paying 0.5% would be £11,614 after 30 years. However, assuming 5% annual growth, the same amount invested would be worth £43,000. will be more than
But the FCA says that of those who invested without advice, 45 percent didn’t realize they could lose money.
The FCA says 6 percent of investors put money in high-risk products during the pandemic.
High-risk investments can include unlisted stocks, forex trading or volatile cryptocurrencies.
Ms Pritchard says younger people were twice as likely to invest in high-risk products, adding: ‘We are concerned that some of those investing, particularly in high-risk products, do not understand the risk .’
The FCA is also working with the government to address concerns over financial incentives.
Money Mail has warned of the dangers of celebrities and sports stars promoting high-risk investments such as cryptocurrency or forex trading to fans. Laura Sutter, head of personal finance at AJ Bell, says: ‘The pandemic has boosted many people’s savings, but much of it is dormant in current accounts to get low returns.
“Whatever the regulator can do to make investing easier for the first time and allowing providers to offer more hand-holding should be commended. If 1.7 million people, each holding £10,000 in cash, all invest their money, collectively they could earn an additional £9.8 billion in returns over ten years.’
And she adds: ‘The pandemic has introduced more people to invest for the first time, but it has also led to an increase in people investing in riskier assets, such as forex trading and cryptocurrencies, to cover the risks involved. has not been properly understood.
‘The worst outcome for someone on their first attempt at investing is to put their money into very risky jobs and wipe out a large part of their savings.’