Will The FCA’s Campaign to Warn ‘Younger Investors’ of Cryptos and other high risk assets work?
Possibly, but it may be too little far too late.
It’s been reported that the FCA is to spend £11Million pounds on an advertising campaign to warn younger people of the risk of ‘get rich quick’ schemes from investing in assets such as cryptocurrencies , FX and anything else that moves (apart from dogs, horses and footballers).
The FCAs ‘concern’ stems from asking a 1000 young high risk taking ‘investors’ about their habits and motivations for investing in non mainstream assets that are unregulated. That’s anything crypto (though ETFs are on the horizon) or foreign exchange related.
The FCA’s ‘concerns’ are hot on the tail of ‘meme’ type tranding activity where hordes of mainly young investors bet with money via information they’ve got form message boards on Reddit and the like.
Few look to hold anything longer than a five years and even fewer look to hold anything less than a year.
The regulator may be taking aim at specific sites with big influencers on them such as Instagram and TikTok. Investigations have established this is where most young people hang out – relatively shielded from the scrutiny of their caring elders.
Worringlyly, it’s been reported that many youngsters thought that FX and Cypto were regulated by the FCA. Shockingly they’re not and this message cleaerly hasn’t got through to youngsters averse to scaling the FCA register.
The campaign has been labelled Investsmart and will penetrate deep into social media to help youngsters understand the risks of unregulated trading in cryptos and fx.
It’s hoped that by intervening early youngsters may be guided to deposit their funds into high interest bank accounts (paying 1% or so) or even products such as Nationa Savings and Investment (NS&I) products offering returns of 0.1%.
It may only be 0.1% but on an invstement of £100,000 that’s an eye wateringly high return of £100 – enough for a pair of cheap trainers!
“Inflation is a problem as officially this may be in the region of 3-5% but in reality it’s running at more like 10-15%. With banks and many other accounts and assets offering such paltry returns it’s incredibly difficult to steer youngsters eager to make money into more traditional regulated products”, says Frank E Hobbs of WealthXplosion.com.
Frank has scoured social media and witnessed many influencers talking up crypto and trading services. He even formed the opinion that Elon Mush may have deliberately (and temporarily) accepted Bitcoin as payment just to ‘pump and dump’ some coins.
But opinion is just opinion and Frank is very aware that opinions sway. He wears a badge and video monitoring equipment to ensure anything he says or does is documented.
Crypto Young Investor Warning and Regulatory Help from FCA
An Uphill Struggle with Youngsters
As anybody who has been young once may remember, the old crusts are always trying to tell you what to do.
Let’s be honest. Your old enough and wise enough to earn some money but when it comes to investing it – many youngsters know nothing.
They’ve yet to experience long term investing and the satisfaction of buying the right assets at the right time and making a packet.
Trust us – we’re regulated is the clear message from the regulated financial service industry.
Get on the housing ladder via partially buying a bit of something (just check out the cladding first) and then invest at least 40% of what you earn into some type of pension. You may only be 17 but it’s highly likely that all the tax and national insurance you’re paying will only go as far a paying for the Social Care needs of the ‘baby boomers’ who need looking after. Think how much your pension contributions will grow by the time you may be eligible to retire – 87 or so.
On a serious note – don’t get influenced to do things you shouldn’t do. Smoking, drugs, listening to classical music and investing (or punting) on digital things that may yield nothing.
If you are adamant to invest (punt) on cryptocurrencies keep in mind the taxation of gains – Read this!
The Crypto Young Investor Warning and Regulatory Help from the FCA is a step in the right direction. The FCA has to balance the reality that crypto and FX is unregulated and this
makes this area very attractive to those that want to avoid regualation. Youngsters are an easy target and there have been frequent warnings from the FCA that investing in Crypto is very
high risk and you may lose all your money. Effetively, putting the warning there because those in this unregulated sphere don’t have to.
This is not advice of any kind and just information with good intention (and bad humour). Yes, it’s hard not to make light of things sometimes but it’s important in life to see the funny things and idiocy around us.
Links are in this post for no particular reason. No information is to sway or persuade. Every effort has been made to make sense and be written up in 30 minutes.