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Younger adults ‘more likely to think long-term when dating than when investing’

The City regulator is encouraging people to apply the same principles to investing as they would to dating.

The Financial Conduct Authority (FCA) commissioned research among 1,000 investors aged 18 to 40, who also use online dating platforms, to understand their approach in both parts of their life.

Nearly half (48%) of those surveyed said they are dating to find a potential life partner.

But their investment outlook tended to be shorter. Only 2% of investors surveyed had a timeframe of more than five years in mind when investing and 14% had no timeframe in mind at all.

The research, to highlight the FCA’s InvestSmart campaign, also explored how investors would react to a “red flag” on a date and when investing.

These potential red flags included a date being rude to the waiting staff and arriving late, or difficulty getting invested money out, or an investment opportunity only being available for a short time.

Men were more likely to continue with a date despite spotting a red flag (49% compared with 39% of women), and more likely to push on with an investment after identifying a warning sign (39% versus 28% of women).

Scrolling through a date’s social media was found to be the most popular way to prepare for a date (57%), although a third (33%) of those surveyed said they were able to ignore hype on a potential match’s social profile.

By contrast, only a fifth (20%) of people said they were able to ignore hype about investments.

The FCA has teamed up with Celebs Go Dating’s Anna Williamson to encourage people to adopt the same principles for investing as they do when dating.

Williamson said: “Relationships and matchmaking are so much more than aesthetics – initial attraction can fade, so you need to look at the bigger picture if you want something to last the long-term.

“The same could be said of investing: don’t buy into the hype, think about what works for you, and consider your longer-term goals, even when making short-term decisions.”

Anna Williamson
Anna Williamson says people should not buy into the hype (Ian West/PA)

Lucy Castledine, director, consumer investments at the FCA said: “It can be an emotional rollercoaster, you’re trying to spot the red flags and hope the expectation lives up to the reality – and that’s just when investing.

“Our research shows young investors are putting more thought into their dating (lives) than their investing lives. Over the past year, we have seen the temptation of high-risk investments increase as consumers balance stretched household finances against the immediate thrill of a quick return. But this may mean investors are ignoring the red flags.

“We want to help investors re-think their approach by spotting the similarities to their own dating lives and applying the same mindset: thinking of the long-term, doing their research and prioritising values that match theirs. We hope this will encourage a more mindful, confident approach to investing in the future.”

Some 1,000 people aged 18 to 40 were surveyed by Censuswide for the FCA’s research.

The FCA’s InvestSmart campaign recommends five important questions to ask yourself before you invest: 

1. Am I comfortable with the level of risk?

2. Do I understand the investment being offered to me?

3. Are my investments regulated?

4. Am I protected if the investment provider or my adviser goes out of business?

5. Should I get financial advice?