The FCA encourages young investors to adopt the same principles to investing as they do to their dating lives, as it launches the latest burst of its InvestSmart campaign.
- New FCA research shows that young investors are thinking more long-term when dating than investing: just 31% of people were investing to earn more money than they would in a savings account, while almost half (48%) invest the time into dating to find a life partner.
- They are also 18% more likely to be influenced by social media when making investment decisions, than in their dating choices.
- The FCA is now partnering with Celebs Go Dating’s Anna Williamson to host an event for young investors - Swipe Left, Invest Right: How the Principles of Dating Can Be Applied to Investing to encourage them to adopt the same principles as they do when dating and become smarter investors.
New research from the FCA has found that young investors think longer-term and are less influenced by social media when dating compared to their investing behaviours. The findings come a week before the FCA hosts an event alongside Celebs Go Dating’s Anna Williamson and a panel of money and dating experts. The event will bring young investors together and encourage them to adopt the same principles when investing as they do when dating.
As use of online dating and investment platforms has grown among young adults, the FCA is exploring parallels to encourage better investment decisions. It surveyed 1,000 young investors, who also use online dating platforms to understand their influences, motivators, risk appetite and research approach in both parts of their life.
As higher interest rates and inflation drive newer investors towards high risk, high return assets, the FCA is highlighting the importance of spotting the red flags, not letting emotions cloud judgement, and avoiding getting swept up in online ‘hype’. Over a quarter of those surveyed (27%) agreed that investing and dating have an initial honeymoon period, while a third (33%) acknowledge they can both be a highly emotional experience.
Quick returns vs. lifetime partners: adopting a long-term mindset
While half (48%) of those surveyed said they are dating to find a potential life partner, their investment outlook is far shorter, only 2% of investors have a timeframe of more than 5 years in mind when investing and 14% have no timeframe in mind at all.
Less than a third of investors had any specific long-term goal in mind when investing, with just 31% of people investing to earn more money than they would in a savings account.
Investing with long-term goals in mind when investing could help over-ride hype and smooth out the effects of market ups and downs.
Lateness to limited time offers: acting on the red flags
The research also explored how young investors would react to a red flag on both a date and when investing. These potential red flags included a date being rude to the waiting staff and arriving late, to difficulty getting invested money out, or when the investment opportunity is only available for a short time.
Men are more likely to continue with a date despite spotting a red flag (49% compared to 39% of women), and more likely to push on with an investment after identifying a warning sign (39% compared to 28%).
Ignoring red flags and investing regardless may put money at higher risk, reinforcing the importance of checking if the investments are regulated and of conducting thorough research to ensure an investment is right for individual circumstances.
Social influence: ignoring the online hype
Scrolling through a date’s social media was the most popular way to prepare for a date (57%), though a third (33%) of those surveyed said they were able to ignore hype on a potential match’s social profile. By contrast, only 1-in-5 (20%) were able to discount investment hype.
Avoiding hype on social media and focusing on investments that suit long-term goals and risk appetite will make for a better investment journey overall.
Lucy Castledine, Director, Consumer Investments at the FCA said:
'It can be an emotional rollercoaster, you’re trying to spot the red flags and hope the expectation lives up to the reality – and that’s just when investing.
Our research shows young investors are putting more thought into their dating than their investing lives. Over the past year, we have seen the temptation of high-risk investments increase as consumers balance stretched household finances against the immediate thrill of a quick return. But this may mean investors are ignoring the red flags.
We want to help investors re-think their approach by spotting the similarities to their own dating lives and applying the same mindset, thinking of the long-term, doing their research and prioritising values that match theirs. We hope this will encourage a more mindful, confident approach to investing in the future.'
At the panel event, Swipe Left, Invest Right: How The Principles of Dating Can Be Applied to Investing, hosted by Celebs Go Dating’s Anna Williamson, guests will get the chance to hear from experts including married couple Ken and Mary Okoroafor, founders of The Humble Penny, Hayley Quinn, Ted X speaker and author of The Last First Date, and Lucy Castledine, Director of Consumer Investments at the FCA.
Host Anna Williamson commented:
'Relationships and matchmaking are so much more than aesthetics – initial attraction can fade, so you need to look at the bigger picture if you want something to last the long-term. The same could be said of investing: don’t buy into the hype, think about what works for you, and consider your longer-term goals, even when making short-term decisions.
'As someone passionate about helping people find the match for them and make it last, I’m thrilled to be partnering with the FCA on this campaign and am looking forward to exploring the parallels between the two worlds with our panel of experts.'
The aim of FCA’s InvestSmart campaign is to help consumers make better informed investment decisions that suit their financial circumstances, directing investors to information available on the FCA’s website. It recommends ‘5 important questions to ask yourself before you invest’:
- Am I comfortable with the level of risk?
- Do I understand the investment being offered to me?
- Are my investments regulated?
- Am I protected if the investment provider or my adviser goes out of business?
- Should I get financial advice?
Notes to editors
- All figures, unless stated otherwise, are from Censuswide, commissioned by the FCA to survey 1,000 UK 18-40 year olds who have invested, are thinking about investing, or have previously invested in one or more high-risk investment products.
- In April 2021, the FCA set out a new three-year strategy designed to improve outcomes for consumers and markets. The strategy focuses on three areas: reducing and preventing serious harm, setting and testing higher standards, and promoting competition and positive change.
- Find out more information about the FCA.