Advantages of mainstream investments

While no two investors’ wants and needs are exactly the same, many favour the peace of mind that comes from common, mainstream investment choices. There are many different kinds of investments available.

Mainstream investments (header)

Mainstream investments are products with wide appeal for a broad range of consumers. These investors are looking for a convenient, accessible and cost-effective way to target attractive long-term returns.

Features of mainstream investments

They’re low-to-medium risk

Every investment carries some element of risk, even if it’s low in some cases.

Lots of us start out with savings accounts that offer low returns without putting our money at any significant risk. But for those who want better returns to help offset the effects of inflation, without putting their money at very high risk, there’s a wide choice of options to invest in, such as funds that invest in the stock market.

These investors should know that their investment returns aren’t guaranteed, and the value of their investments can go down as well as up. But they’re willing to take some degree of risk as they target higher returns than savings accounts offer.

They offer easy access to your money

Some investors are happy to put their money away for a fixed period, confident that they won’t need access to it in the meantime. But for many investors, being able to access their money is important, should life take an unexpected turn.

Savings accounts can be a great place to build up an emergency cash buffer. But for those willing to take on a little more risk, mainstream investment funds are another option. These give you easy access to markets while still being simple to buy or sell. These mainstream products offer access to your money should you need it, without the need to pay significant fees or penalties.

They’re popular

The sustained popularity of mainstream investments demonstrates how they’ve met many investors’ needs over the years.

While other kinds of investments target niche clients – perhaps those looking for high-risk, high potential rewards in specialist areas like art or fine wine – mainstream investments have consistent and enduring appeal to a wide range of investors.

They have regulatory protection

Regulation aims to ensure that consumers are treated fairly and that there’s competition between financial services companies. That way consumers benefit from a healthy market in investments from many different providers.

Financial services firms authorised and regulated by the FCA offer a vast range of mainstream investment products to consumers. If an authorised firm has carried out a regulated activity in relation to the investment, for example provided advice, you may be able to refer a complaint to the Financial Ombudsman Service (FOS) or make a claim to the Financial Services Compensation Scheme (FSCS) if the firm has gone out of business and is unable to pay compensation (sometimes referred to as redress).

If you’re not sure whether an activity undertaken by a firm is regulated by us or the Prudential Regulation Authority (PRA), you should ask the firm to confirm in writing what protections will be available to you if you need to make a complaint or claim compensation.

What the FSCS and FOS do


Examples of mainstream savings and investment choices

Instant access savings account
A popular first step, savings accounts offer peace of mind and easy access to your money. When saving via a Cash ISA wrapper (ISA stands for ‘Individual Savings Account’), these accounts can be a tax-efficient means to start building up a ‘rainy day’ fund, save for an important life event, a house deposit, or just to hold as an emergency cash buffer.


Invest through funds

These collective forms of investing can offer investors a wide range of opportunities to grow their money, provide income or a combination of the two.

Also available through a tax-efficient Stocks and Shares ISA wrapper, mainstream funds typically invest in a broad basket of shares or in bond markets in the UK and beyond. Some funds have ethical themes for investors who want to avoid companies in areas such as tobacco or defence, while others offer a range of sustainability themes.

Funds provide a level of diversification that can help to smooth out long-term returns and reduce overall risks to your investment. Read our article on how your investments could benefit from diversification.


Direct investment in shares
Some investors who are prepared to take more risk with their money choose to invest in the stock market themselves. Investors who decide to buy shares in public companies directly can also benefit from tax advantages through the use of a Stocks and Shares ISA.

Why mainstream investments might be right for you

They’re better for inexperienced investors

For the many people who are looking to invest over the long term, taking low-to-medium levels of risk, but don’t have the time or inclination to research their investment options in detail or consult an independent financial adviser, mainstream investments can represent a convenient, cost-effective choice.

As with all investments, it’s important to understand any mainstream product you’re considering, so don’t hesitate to contact the investment provider if you have questions.

They’re aligned to long-term investment goals

Mainstream investments can offer a balance of risk and returns that fits with many investors’ long-term objectives. Although funds that invest in shares and bonds cannot offer performance guarantees, and the value of investments can go down as well as up, mainstream investments aim to produce attractive returns for investors over the long term.

They’re professionally managed

Some mainstream funds are professionally managed by professional investors (fund managers) who aim to outperform the wider market in which the fund operates. Known as ‘active’ funds, these try to beat the returns from a market index, such as the UK FTSE 100 of the country’s biggest traded companies. Of course, outperformance is not guaranteed and active funds can perform less well than the wider market.

Other mainstream funds take a ‘passive’ approach, aiming to match the performance of a market index. The management charges for these ‘tracker funds’ (so called because they track a stock market index) is typically lower than for active funds, making them a popular choice among mainstream funds for many investors.

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