FCA Launches £11m Campaign To Help Britons Invest Better

16 September, 2021 by Denzil Otieno 4 mins read Category:  Money Personal Finance

Yesterday (16th, Sep 2021), the money watchdog inaugurated an initiative to make us a nation of savvy investors. 

The Financial Conduct Authority (FCA) has vowed to help investors whose nest eggs waste away in peanut-paying saving accounts. 

Additionally, the firm pledged to reduce the number of investors ploughing money they cannot afford to lose into high-risk investments by half. 

To achieve this, FCA is planning to launch  £11 million to help local investors make informed decisions when investing their money, reducing the risk chances. 

While talking to Money Mail, Sarah Pritchard, executive director of markets at FCA, said that the technology has democratised the market by availing new products for investors. Investors now have better access to their savings than ever. 

She, however, warned that this freedom comes with risk. As a result, the company promised to help investors understand the nature of the risks involved and evade them. 

However, the organisation appreciates that investing is not suitable for everyone; therefore, they only target investors who believe that they could make huge benefits and help them achieve their dreams.  

Watchdog Helps Savers 

The firm observed that about 8.6 million of us hold over £10,000 in cash saving accounts, bringing awesome rewards if strategically invested. 

On the other hand, if the same amount is invested in, assuming a five pc annual growth, it’ll be worth £43,000 after the same period. 

The FCA has also promised to reduce the money lost due to investment scams perpetrated by companies it oversees.

In the 2020/2021 financial year alone, it was reported that investors lost £570 million to scam—this was three times the amount lost in 2018. 

Consumers have invested £1.6 trillion through 6,000 wealth managers and advisers.

However, the FCA says that more than 45pc of the investors did not seek professional advice to help them grasp that they could lose their money. 

The firm also observed that during the pandemic (Covid-19), about six per cent of the investors deposited their money high-risk products. 

These high-risk investments could include Forex, unlisted stock or volatile cryptocurrencies. Ms Pritchard mentioned that youths are more prone to fall for such products, which promise awesome returns. 

FCA and Government Join Hands 

The FCA has also partnered with the government to address the issues over financial promotions. 

Money Mail has advised against celebrities and sports superstars promoting high-risk products such as cryptocurrency and forex trading. Laura Suter, head of finance at AJ Bells, observed that many people resorted to saving money in the wake of the pandemic. Still, a good portion of it is idling in the current accounts, getting trivial returns.

Ms Laura further stated that anything the regulatory can do to ease first-time investment and enable the providers to offer more assistance should be appreciated. If 1.7 million people, each having £10,000 in cash, invested it all, they could generate £9.8 billion more in ten years.’

She added that the pandemic has led many people to invest for the first time but has also led to a spike in people investing in risky products without fully grasping the risks involved. 

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