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‘Too many people equate investment with gambling’

‘Too many people equate investment with gambling’

The industry must address the fact that most consumers equate investment with gambling, which means there is an overwhelming reliance on cash, according to BlackRock’s managing director of UK retail.

Speaking at a Tax Incentivised Savings Association (Tisa) conference, Tony Stenning said that an over-reliance on cash – backed by his firm’s recent survey – was increasingly creating “real problems” for society.

“We need to develop industry-wide rules of thumb, which can be communicated simply to consumers,” he said, adding that while digital presented an opportunity, things such as robo-advice were not a panacea.

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“Many people aged over 55 are worried about their retirement, but the data shows that few have sought guidance or advice since the freedoms were introduced. Confidence in financial services and their own financial capability is abysmally low.”

BlackRock’s research, which takes in more than 4,000 UK consumers, found allocations to cash were 41 per cent, versus the 33 per cent they thought they should ideally hold.

In terms of ‘millennials’, 62 per cent said “investing is like gambling”, and despite their longer investment horizon, they held high amounts of cash – 70 per cent of their portfolio was in cash or cash-like investments.

Mr Stenning’s comments were backed by Henderson Global Investor’s head of customer strategy Steve Jenner, who reiterated Tisa’s research and requests for a kitemarked guidance framework to be introduced.

He said; “Guidance currently stops short of product purchase, providers are too scared to be seen straying into recommendations, so we need a safe harbour of non-complex product options.”

Adviser view

Rory Stuart, wealth planner for Bristol-based Sanlam Wealth, said: “To ensure that they are prepared for retirement, people should map out their short-term financial commitments against longer-term goals. This kind of prudent planning will help make sure that immediate financial obligations can be met, while helping to safeguard their retirement fund.”

peter.walker@ft.com