“There are clear financial dangers if traders indulge in highly speculative behaviour and put money into products as part of a gaming mentality rather than pursuing a well thought-out investment strategy.
“The more established investment platforms, like ours, don’t provide chat communities, which can fuel short-term trading behaviour.”
Playing the long game
Although shares that have been the focus of speculation have become more sought after on its platform, Hargreaves says it is making every effort to encourage traders to diversify their holdings through client communication, and risk warnings are fed straight through to clients via the app and online accounts.
These warnings flag the dangers of stock market speculation, and urge clients to think twice before buying ‘hot’ stocks that are high in demand.
Bella Caridade-Ferreira, chief executive of Fundscape, says: “I always say to young people, 'all the fund managers who do this for a job study the market and they still don’t always get it right, despite their best efforts', so why young investors think they are going to identify the stock that will make them rich is beyond me.
“But the interest [to invest] from young people is there, so we don’t want to kill it off. Now we just have to convince them the tortoise approach is better for long-term investing.”
Ima Jackson-Obot is deputy features editor at FTAdviser