Financial Conduct Authority  

One in three investors 'vulnerable': Boring Money

One in three investors 'vulnerable': Boring Money
Holly Mackay, CEO of Boring Money

Research from Boring Money indicates that one in three of all investors fall into the Financial Conduct Authority’s definition of vulnerable. 

Boring Money surveyed 4,500 UK adults about physical, emotional, and financial vulnerability.

The research found that the median asset value for vulnerable investors was £38,000 compared to £100,000+ for non-vulnerable investors, while vulnerable customers were more likely to be less well-off.

Boring Money chief executive Holly Mackay commented: “Vulnerable is a powerful word and it’s easy to think of this as a small minority of investors, particularly as we know that investors are typically the most affluent segment of society.”

The research found that: 

  • One in five of all investors classified themselves as vulnerable.  
  • 27 per cent of all investors said that their confidence about investing out of ten is two or less.
  • The net total of investors who have reported vulnerability on the regulator’s stated criteria is 34 per cent

FCA guidance determines vulnerable customers as those who need special consideration due to health, life events, financial resilience, and capability.

As well as determining which customers should be termed vulnerable, the FCA also determines how investment firms look after and manage vulnerable customers.

Mackay continued: “If we think about the full range of criteria, from physical and mental health, to impactful life events such as divorce or bereavement, as well as the double whammy of low financial resilience and confidence, it’s striking to see that one-third of all investors today self-classify as vulnerable by the regulator’s standards.”

Vulnerable customers were also more likely to be young and female.

A survey conducted by the FCA in 2020 found that the Covid-19 pandemic raised the number of vulnerable adults in the UK to almost 28m

Mackay said she expected that more investors will become vulnerable this year.

“With financial resilience set to come under pretty heavy fire from this Autumn, this percentage seems only likely to increase," she said. 

"It’s a real call to action for firms to truly understand their customer base, when creating and marketing investment products and services.”