FCA seeking to encourage £17bn of consumer investments

The £11m campaign by the FCA will cut the number investing in high-risk assets

The FCA has set out a plan for 2021/22 to allow consumers to make “effective investment decisions”.

“We want to see a consumer investment market in which consumers can invest with confidence, understanding the risks they are taking and the regulatory protections provided,” the regulator said.

“We do not want to restrict consumers if they want to invest, but we do want them to be able to access and identify investments that suit their circumstances and attitude to risk.”

8.6m people have £10,000+ in investable assets and the FCA wants to reduce this by 20%.

The £11m campaign by the FCA will cut the number investing in high-risk assets.

This could equate to £9.8bn of additional returns for savers.

Long-term social and economic changes have made the consumer investment market more important than ever.

“Consumers are increasingly responsible for making complex decisions about their financial future, including whether and how they invest,” the FCA says.

Laura Suter, head of personal finance at AJ Bell, comments on the FCA’s plan for the investment market:

“The regulator is taking a two-prong approach – on the one-hand trying to get more people to invest their money rather than leave it in cash and on the other trying to shield inexperienced investors from risky investments.”

“The FCA’s plan is to get almost two million more people to invest, as its research shows 8.6 million people currently have over £10,000 investable assets in cash and it wants to reduce that by 20%. If 1.7m people invested £10,000 in the stock market, that represents a £17bn influx of money to the investment market,” said Suter.

“The pandemic has boosted lots of people’s savings pots but most of it is idling in current accounts getting paltry returns, when in reality much of it could be invested. The issue is that lots of these people feel unable or ill-equipped to start investing. Anything the regulator can do to make taking that leap into the stock market for the first time easier and to allow providers to offer more hand-holding should be applauded.”