Consumer Duty rules define 5.6 million as 'vulnerable investors'

It said the 5.6 million vulnerable investors fell into the classification because of factors such as health, life events, financial resilience and or capability, including knowledge or confidence.

Boring Money said when focusing on confidence alone, a "significant" 27% of all investors said that their confidence about investing is rated two or lower out of ten.

It also said when asked about physical, emotional and financial vulnerability, a fifth of investors self-classified as vulnerable.

It said these vulnerable customers are more likely to be young, female and less well-off. The median asset value for vulnerable investors is £38,000 compared to £100,000 plus for non-vulnerable investors.

Boring Money chief executive Holly Mackay said: "It's very hard for asset managers in particular to build a detailed picture of who their retail investors are, as so few buy direct. Our research confirms that brand plays a role, with larger generalist financial services brands typically having more vulnerable customers than smaller UK-focussed asset management specialists.

"We can also see how the low confidence element of vulnerability plays out. 25% of vulnerable investors describe the risk profile of their investment portfolio as one or two out of five, compared to 19% for non-vulnerable investors. This raises the question of how to best protect their long-term savings in a responsible and appropriate manner."

She added: "As many vulnerable investors are younger, it is not always the case that these lower-risk portfolios will deliver the best outcomes for them. And who takes on the challenge of this communication to vulnerable investors with median portfolio sizes of £38,000, who will typically be priced out of advice?"