Barclays has called on the Government and Financial Conduct Authority (FCA) to fix investors’ “decision paralysis” through deregulation.
How to invest money ranks as the second hardest decision in a person’s life, only behind whether to buy a house, according to fresh research from the bank.
As the FCA, in a joint venture with the Government, considers proposals for the Advice Guidance Boundary Review to close the “advice gap” around investing, Barclays has called for simplification.
The biggest barriers to investing, according to the survey’s 2,000 respondents, were a lack of knowledge, at 44 per cent, and fear of losing money, at 41 per cent.
In light of the results, the FTSE 100 giant said it was “reiterating” its five public policy recommendations to “close the UK’s investment gap and empower savers”.
Amidst Chancellor Rachel Reeves’ mission to “cut the red tape” and trigger economic growth, Barclays stated investment woes are “exacerbated by current industry regulation”.
It said regulatory changes by the Government would “enable firms to suggest investment actions to customers with large cash balances, based on ‘people like you’ personas”.
Firms are ‘restricted’ on guidance
Sasha Wiggins, chief executive of the bank’s private arm, told City AM: “At Barclays, we are supportive of a UK regulatory framework that protects investors while also ensuring accessible entry-points and clear, actionable guidance to make investing more inclusive.
“Today, many firms that want to deliver more targeted support to would-be investors are restricted in the level of guidance they can give.
“To empower individuals with greater confidence in investing while fostering a more favourable environment for UK economic growth, a well-balanced regulatory framework is essential.
“We have identified several policy solutions which the FCA may want to consider through their Advice Guidance Boundary Review, such as allowing firms to suggest actions to customers with large cash balances, based on ‘people like you’ personas.”
Research estimates 13 million UK adults hold around £439bn of “possible investments” in cash deposits but are leaving their money with less time to grow over the years.
Barclays urged the FCA to develop a ‘badge’ for entry-level investment products that could be suited for less experienced investors.
The lender has also called on the Government to adopt an “explicit policy aim” that monitors the development of easily accessible comparison tables for ‘badged’ investment products, allowing consumers to make side-by-side comparisons.
Clare Francis, director of savings and investments at Barclays Smart Investor, said: “Choosing to invest should not be considered more difficult than life-altering decisions such as shaping your career or retiring.
“The industry has made significant strides to provide tools and education to help people find a balance between saving and investing, but our findings demonstrate that more needs to be done.
“We have to help people recognise the valuable role investing plays when it comes to growing their money and that it isn’t as complex and daunting as many perceive it to be.”