Arab Press

بالشعب و للشعب
Friday, Mar 29, 2024

People could be asked to watch educational video before investing

People could be asked to watch educational video before investing

Financial Conduct Authority says current ‘risk warnings’ are often ignored by consumers
People looking to put money into higher-risk investments could be required to watch educational videos or pass an online test first, the City regulator has suggested.

The Financial Conduct Authority said the current “risk warnings” on investments were often ignored by consumers, and it also floated the idea that people might have to disclose their salary and other personal information as part of the sign-up process for certain products.

The regulator is concerned that too many investors – particularly a new breed of mainly younger DIY investors – are taking big financial risks by putting money into products that may be inappropriate for them, such as cryptocurrencies and foreign exchange, and could end up losing some or all of their cash.

It has expressed concern about the growing influence that sites such as YouTube, Instagram and TikTok are wielding.

Some commentators say the FCA has been stung by criticism over its mishandling of previous high-risk investment schemes that have gone wrong. It has been slated over its failure to properly regulate the “mini-bond” firm London Capital & Finance (LC&F) before it collapsed in 2019. Taxpayers now face a £120m bill for compensating thousands of people who lost money in that scandal.

Publishing proposals to strengthen the rules relating to “financial promotions”, the FCA said: “Too often consumers are investing in high-risk investments they don’t understand and [which] can lead to significant and unexpected losses.”

Other investments defined as potentially high-risk include investment-based crowdfunding and peer-to-peer lending.

Many financial adverts and websites carry warnings along the lines of “your capital is at risk”, but the FCA said these were often perceived as “white noise” by many investors.

Some investments already carry restrictions, but the regulator said it wanted to do more to prevent people from simply “clicking through” and signing up for risky products they did not understand and which did not match their risk appetite.

It said measures it might consider included requiring would-be investors to watch educational videos on topics such as investment risk and “the benefits of diversification”, and flushing out those people who were not sufficiently knowledgable about financial products by requiring that they take, and pass, an online test.

Other ideas floated include introducing “frictions” into the process such as requiring a text message confirmation before an investment is made, and making people provide additional information such as details of their salary, net assets and how much they have previously invested in other high‑risk schemes.

Becky O’Connor, head of pensions and savings at the website Interactive Investor, said: “In a world of TikTok investment influencers and bitcoin advertisements on the London Underground, and at a time when some people are feeling flush after lockdown and keen on finding quick ways to make a profit, there are real risks that people will succumb to high-risk investments that aren’t right for their circumstances.”
Newsletter

Related Articles

Arab Press
0:00
0:00
Close
China Criticizes US for Vetoing UN Ceasefire Resolution in Gaza
Saudi Arabia ranks first in UN index for e-government services in MENA
Israel Records 20% Drop In GDP, War In Gaza Is The Reason
Saudi Arabia's FDI Inflows Grow with New International Standards
Venture Capitals Power Up Across MENA Region
PM Modi Announces Opening Of New CBSE Office In Dubai
January Funding for MENA Startups Totals $86.5 Million
Saudi Arabia accelerates digital economy growth through Nvidia partnership
Israel unveils tunnels underneath Gaza City headquarters of UN agency for Palestinian refugees
Israel deploys new military AI in Gaza war
Egypt threatens to suspend key peace treaty if Israel pushes into Gaza border town, officials say
Saudi Arabia Warns Of A "Humanitarian Catastrophe" If Israel Moves On Rafah
US University To Shut Qatar Campus Due To "Heightened Mideast Instability"
Facebook and Instagram Ban Iran's Supreme Leader
Defense Technology Showcase Held in Riyadh
Saudi Arabia’s non-oil exports rise 2.5% to $6bn in November 2023: GASTAT
Rolls-Royce Executive Encourages Saudi Women to Tap into Their Inner 'Superhero' for Success in Defense Industry
Saudi Arabia launches National Academy of Vehicles and Cars
Saudi Tourism Minister Reveals Plan for 250,000 New Hotel Rooms by 2030
SAR to more than double eastern network passenger capacity with new trains deal
Saudi Arabia Enhances National Defense with New Partnerships
Saudi Aramco Maintains Arab Light Crude Pricing to Asia for March
NEOM Establishes New York Office to Support Investors
Saudi Wealth Fund Draws in Over $25 Billion Worth of Investments in Three Years, Al-Rumayyan Reveals
The Saudi Kingdom's Ultimatum to Israel: A Win-Win Peace with Saudi Arabia and the Arab World, or a Lose-Lose Continued Occupation and Endless Conflict
Biden condemns anti-Arab hate after WSJ opinion piece calls Dearborn ‘jihad capital’
Turkey Releases Seven Hostages Captured by Pro-Gaza Gunman
Arab Parliament Commends Women's Contributions to Societal Development
British and Hungarian Foreign Ministers visited Lebanese leaders to stress the importance of enacting UN Resolution 1701
Yemen's Houthis Say They Targeted British Merchant Vessel In Red Sea
Donald Trump Nominated for Nobel Peace Prize for 'Historic' Middle East Policy
US lawmakers approve F-16 jet sale to Turkey following NATO expansion support
Saudi Arabia Climbs 25 Places in World Bank's National Statistics Indicator
Tourism Growth in Saudi Arabia Fuels Advancements in the Hospitality Industry," Says Rotana Official
Houthi Rebels Request Departure of UN Staff from Yemen, Including US and UK Personnel, within a Month
Modi Inaugurates Hindu Temple on Site of Demolished Mosque in India
Over 25,000 Deaths in Gaza Amid Israeli Offensive
Escalating Clashes in Gaza as Israel Distributes Leaflets to Assist in Locating Hostages
Turkey's First Astronaut Set to Launch for International Space Station Today
Head of Palestinian Investment Fund Warns More People May Die of Hunger Than War in Gaza
Palestinian Envoy Criticizes UK for Alleged 'Double Standards' in Policies Toward Israel
Morocco to Lead UN Human Rights Council in 2024
Is artificial intelligence the solution to cyber security threats?
Egypt has been identified as the leading military force among Arab nations and ranks 15th globally
The AI Revolution in the Workforce: CEOs at Davos Predict Major Job Cuts in 2024
Iranian Nobel Laureate Narges Mohammadi Receives Additional Prison Sentence
"Gazans Urge Israeli Forces to Target Hamas in Leaked Audio"
Biden States US and UK Airstrikes on Houthis Were a 'Defensive Action
Large Pro-Palestine Rally in London as Gaza Conflict Hits Day 100
South Africa Urges World Court to Halt Israeli Actions in Gaza
×