How do we view risk? A Look at Our Changing Attitude to Investment

26.03.2019 by Jim Ker

Few things in life are completely risk-free: jetting off on holiday, making a big career move or purchasing a new car are just three scenarios that can present underlying issues.

Saving and investing, specifically, can involve a variety of risks, but by striking a balance between such challenges as inflation or a rise in fall in share prices, you have a much better chance of managing them.

In the first instance, consider your attitude to risk, before mapping out your investment goals and your personal circumstances: for example, your capacity for loss. Looking to weigh up the risk factors to make more of your new ISA allowance? We’ve collected a number of factors for you to consider.

To help us better understand our own views on risk – and the attitudes of others – the Financial Conduct Authority (FCA) has compiled a survey which delves into the financial lives of UK adults and how we view and adapt to risk. Here’s what we found:

Confidence is Key
One of the most enlightening findings of the survey is this: almost a quarter (24%) of UK adults have little or no confidence in managing their money, with 46% of UK adults reporting low knowledge in financial matters. Furthermore, while 50% of UK consumers “currently show one or more characteristics of potential [financial] vulnerability”, it is worth noting that ‘potential vulnerability’ does not mean that all people with these characteristics will suffer harm.

A Taboo Word
Indeed, ‘risk’ is seen as something of a taboo; we spot the word and tend to steer well clear. Yet people can assess and manage risk by simply educating themselves further on the products that interest them. It’s worth noting that any kind of investment comes with risk, but the degree as to how much is, and will always be, variable.

According to the FCA survey, 50% of the population in the UK shows characteristics of vulnerability, but this is owing to low financial resilience (30%), the experience of one or more recent life events (19%), low financial capability (17%), and relevant health issues affecting day-to-day activity (5%).

Planning for the Future
Of the population, 40% have confidence in the UK financial services industry. Meanwhile, the survey suggests that protection is in place for those who are vulnerable. “There is a careful balancing act to be achieved that involves the FCA, financial services firms and wider stakeholders to ensure that consumers, when they are vulnerable, are helped, protected and served better, and able to participate in mainstream markets,” it states.

How does your view on risk affect your saving and investment decisions? Get in touch and let us know.

Source: https://www.fca.org.uk/publications/research/understanding-financial-lives-uk-adults

Please Note: You must confirm you have read the key facts, before downloading this document.

Key Facts about our services and costs

1. The Financial Conduct Authority (FCA)

The FCA is the independent watchdog that regulates financial services. This document is designed by the FCA to be given to consumers buying certain financial products. You need to read this important document. It explains the service you are being offered and how you will pay for it.

2. Whose products do we offer?

We offer products from the whole market

We only offer products from a limited number of companies

We only offer our own products

3. Which service will we provide you with?

We will advise and make a recommendation for you after we have assessed your needs.

You will not receive advice or a recommendation from us. We may ask some questions to narrow down the selection of products that we will provide details on. You will then need to make your own choice about how to proceed.

We will provide basic advice on a limited range of stakeholder products and in order to do this we will ask some questions about your income, savings and other circumstances but we will not:

  • conduct a full assessment of your needs;
  • offer advice on whether a non-stakeholder product may be more suitable.

We can only offer products from Kingston Unity Friendly Society. These products will enable you to:

  • protect yourself and your loved ones in the event of death
  • save and invest with the added benefit of protecting yourself and your loved ones in the event of death
  • provide benefit cover in the event of sickness

4. What will you have to pay us for our services?

Normally, if you buy a financial product direct from us, there will be no payments such as commission or fees payable. If there are any commission or fees payable, we will tell you how we get paid and the amount before we carry out any business for you.

5. Who regulates us?

Kingston Unity Friendly Society, 9 Navigation Court, Calder Park, Wakefield, WF2 7BJ is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and .the Prudential Regulation Authority. Kingston Unity Friendly Society’s FCA Registered Number is 110056.

Kingston Unity Friendly Society permitted business is advising and arranging life assurance and pensions business.

You can check this on the FCA’s Register by visiting the FCA’s website www.fsa.gov.uk/register or by contacting the FCA on 0845 606 1234.

6. What to do if you have a complaint

If you wish to register a complaint, please contact us:
…in writing Write to Kingston Unity Friendly Society, Complaints Department, 9 Navigation Court, Calder Park, Wakefield, WF2 7BJ. …by phoneTelephone (01924) 240164

If you cannot settle your complaint with us, you may be entitled to refer it to the Financial Ombudsman Service.

7. Are we covered by the Financial Services Compensation Scheme (FSCS)?

We are covered by the FSCS. You may be entitled to compensation from the scheme if we cannot meet our obligations. This depends on the type of business and the circumstances of the claim.

Most types of insurance business are covered for 90% of the claim with no upper limit.