UK Regulators Reveal Retail Investors Find Research ‘Too Complicated’

A study by the United Kingdom’s Financial Services Compensation Scheme (FSCS) and the Financial Conduct Authority (FCA) revealed grave concerns about the investment habit of retail investors.

A press release issued on Wednesday stated that 42 percent of British investors between the age of 18 and 24 years casually take investment decisions without any research. They invest while sitting in bed, watching TV/Netflix, at the pub, or coming back from a night out, the data shows.

In addition, the agencies detailed that among 37 percent of the UK adults who hold investments of between £100 and £50,000, almost 44 percent wished they did more research before investing. But, they find investment research to be 'time-consuming' or 'too complicated'.

“With almost two in five adults holding investments in the UK, it’s clear there’s a growing appetite to start investing as online platforms are making it easy and accessible for everyone,” said Lila Pleban, an FSCS spokesperson.

“But as our findings show, carving out time to research and look into investment opportunities is not always top of people’s to-do lists and unfortunately, puts them at a higher risk of being scammed or putting their money with an unprotected platform or provider.”

Too Much Ignorance?

Indeed, 22 percent of the surveyed investors don't even check or know if their investment is FSCS-protected. It is alarming as it puts their investment at risk.

Additionally, more than a quarter of the respondents said that they prefer time-bound investment opportunities. Moreover, it puts them at risk of scams.

The FCA’s Enforcement Director, Mark Steward said: “Fraudsters will always find new ways to target consumers, so make sure you do your homework and spend some time doing research. Just a few minutes can make a big difference to your investment choices.”

Meanwhile, the FCA is actively monitoring the investment scenario in the UK and is flagging fraudulent activities. It recently asked investors to be aware of screen-share scams, to which victims lost more than £25 million between January 2021 and March 2022.