Nearly half of UK investors do not research, a FSCS and FCA study shows

Financial Services Compensation Scheme (FSCS) and the Financial Conduct Authority (FCA) today revealed in a study that 44% of investors wished they had spent more time researching their investment.

According to the study into the investment habits of retail investments, 42% of British investors of age 18 to 24, say their latest investment was made casually without any research. The study shows they did their investments were done while sitting in bed, watching TV/Netflix, at the pub, or coming back from a night out.

The data revealed that among 37% of UK adults who hold investments of between £100 and £50,000, almost half (44 %) did not do investment research because it was “time-consuming” or “too complicated.”

Lila Pleban, Spokesperson for FSCS, said:

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. 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.

Nearly half of investors do not research, a FSCS and FCA study shows

Additionally, the study found that a quarter of adults that hold investments, prefer to invest in an “investment opportunity” with a limited time frame, which poses a risk of a scam.

22% of the participants in the research say they have not checked or they do not know if their investment is FSCS-protected. This is alarming as it puts them at risk of no possibility of compensation if something were to happen to the investment platform or provider. FSCS protection gives up to £85,000 compensation against an FCA-authorised firm that has failed.

Mark Steward, Director of Enforcement of the FCA, added:

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.

The FCA recently flagged screen sharing scams that on the rise with £25 million already lost.

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