The Scoop

The Regulatory Shift From The FCA

FCA Shift

If you have read some of our articles or blogs before, you’ll know we have a lot to say about regulators.  And most if it isn’t complimentary.

Yes, it’s good that there’s a lot more regulation nowadays (meaning most unqualified cowboys can no longer advise the unsuspecting public.). But is hasn’t made life any easier for IFAs.

When it comes to investment advice, the FCA have previously always aired on the side of caution.

However, in a recent report, they are encouraging consumers to invest money to ensure they don’t miss out on potential growth.

Investments can help improve the lives of consumers in a variety of ways. From saving for your first home, for your dream car, to dealing with unexpected expenses or saving for later life, investments are vital throughout the consumer lifecycle.

Speaking of the unexpected, the coronavirus pandemic has made the investment market all the more important for both individuals and companies, which contribute to the support of the UK economy as a whole.

In the report, the FCA found that many people are holding money in cash instead of investing it. They stated that by doing this, consumers are “missing out on the potential opportunity to make their money work better for them in the longer term”.

They then went on to say “Many consumers do not seek, or receive, the sort of help with their finances that would equip them to make better investment decisions.”

Although this seems like a 180-degree flip from the cautious messages they generally spew, the FCA does have a point.

Over the long-term, people do tend to see better returns on their investments, which is where our own mantra of ‘it’s time in, not timing’ comes from.

Obviously, having some short term, easily accessible cash savings in case of emergency is important for everyone. However, if you’re looking for better long-term returns on your investments, the general recommendation is not to try and time the markets, but instead to invest and stick with it.

The FCA report also presented some surprising statistics for those who did (or should we say didn’t) seek advice on their investments.

Their research found that over the last 12 months, 54% of UK adults with £10,000 or more of investible assets (around 8.4 million people) did not receive any formal support or advice to help them make investment decisions.

The FCA continued “Not all of these consumers will need or want support, or be aware they could benefit from it. However, we believe that many consumers would benefit from receiving support to help them make investment decisions.”

Who’d have thought that we’d be agreeing with the regulators?  Strange times indeed!


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