The Financial Services Consumer Panel is calling for a standardised approach to explaining risk to consumers, although advisers expressed scepticism over the practicality of the scheme.
A research paper: ‘Investment Risk Rating – Consumer attitudes towards risk’, carried out by IFF Research on behalf of the FSCP, shows while consumers have a broad understanding of the risk-reward relationship, nearly all of them see risk as one of the key barriers to investing. Although, the paper admits the research was only commissioned to gain a ‘toe in the water’ appreciation of consumers’ knowledge of risk, and their views on whether a standardised risk scale would be useful to them. The 51-page research paper, resulting from eight consumer focus groups and four in-depth intervi...
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