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Investment Red Flags

How good are you at spotting potential investment scams? That’s the question which the Financial Conduct Authority (FCA) put to a group of 18–40 year-olds and the answer was surprising. Just 5% said they would be suspicious of pressure to buy now to stave off a price rise, with 36% saying they would recognise a ‘last chance to buy’ sales tactic as a reason to be cautious. Contrast this with the same individuals’ perception of horror films - with 59% and 65% recognising similar scenarios as suspicious.

When it comes to peer pressure the same pattern appears. So, whilst 80% of respondents recognised a ‘trust me it’s fine’ scenario as a sign of horror to come in a film, 29% said that group chats amongst friends would lead them to invest without undertaking research first.

Commenting on the research Lucy Castledine, director of consumer investments at the FCA, said: 'Many people can spot a horror movie trap a mile off, but this survey suggests they’re far less likely to recognise the same tactics when they're used to influence investment decisions. Hype, urgency and fear of missing out can all influence how people invest, so before acting on an opportunity, do your research and make sure it's right for you.'  

If you are looking for advice on investments or if your situation has changed and you may therefore need to review your existing pensions or investments, contact Beckworth by using one of the links on our website.