A third of advisers believe the Government’s new retail investment campaign will fail to have an impact on consumers, new research from Flagstone has revealed.
The Take The Next Step campaign was launched in April in a bid to turn cash savers into investors by demystifying investing and showing it can be an attainable goal.
However, only 45% of advisers said the campaign will have the desired effect to ‘an extent’, while 33% do not believe it will have the type of impact the Government would like to see and a further 20% say it is too early to tell.
According to Flagstone, almost half (47%) of advisers believe the cost of living means that people can’t afford to invest and 42% believe a lack of trust in financial markets will deter people from giving it a go.
Two in five (39%) also believe people’s lack of understanding of how investing works will be a deterrent, while a quarter (26%) say timing is not on the campaign’s side, having been launched while markets are extremely volatile.
Yet, despite scepticism over the ability of the campaign to reach its full potential, the majority (76%) of advisers believe campaigns like Take The Next Step can positively influence investor behaviour. However, 26% warn that this campaign will only alter investor behaviour alongside wider policy changes, such as tax or access to advice.
John Martin, CPO at Flagstone, said: “While advisers agree that the cost of living crisis is the key reason this campaign may struggle to achieve its potential, it’s fascinating to see that high proportions of advisers also believe that a lack of trust in markets and a lack of understanding will be key barriers to success.
“These are critical knowledge-based obstacles that advisers can unlock for potential new investors. How well this campaign works with advisers to empower them to promote a healthy approach to diversified cash and investment management will be fundamental to its success.”
Asked what the signals of success would be, 65% of advisers cited seeing more first-time investors enter the market. That was followed by seeing more people seek financial advice (45%) and improved understanding among investors of risk and reward (33%).
Almost one in three (28%) cited seeing more people make more regular investments.
Martin added: “There is strong positivity among advisers that a successful campaign will inspire more people to seek their advice. It would be encouraging to see more regular investing too.
“For many people, that journey won’t start with investing. It will start with understanding what to do with their cash savings and building confidence in financial decision-making more broadly. Advice has an important role to play in both.
“The more consumers understand how to make their money work harder, the more likely they are to engage with longer term financial planning.”
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