Fresh research from The Investing and Saving Alliance (TISA), conducted in collaboration with the University of Nottingham, has identified consumer anxiety as the primary barrier to broader stock market participation. The study found that targeted support focusing on attitudes toward investing, rather than demographic factors, can increase investment allocations by at least 30 percent.
Overcoming Psychological Barriers
The research uncovered that aversion to risk, expectations of low returns, and a preference for keeping money within the UK are key factors deterring Britons from investing. When support recommendations were designed around these specific attitudes, they proved significantly more effective than approaches based on age, gender, income, or other social demographics.
The targeted support scheme, which launched on April 6, enables financial firms to provide tailored suggestions to groups with shared needs. This initiative aims to bridge the advice gap while allowing firms to operate without fear of regulatory penalties for exceeding standard guidance boundaries.
Breaking Structural Barriers
This attitude-focused approach has proven particularly effective for groups traditionally less likely to invest. Women increased their investment allocations by 31 percent, compared to a 14 percent increase among male counterparts, demonstrating the support's ability to address structural barriers that have historically limited female participation in investing.
The support also significantly increased engagement among first-time investors and cash savers, aligning with broader industry, regulatory, and governmental objectives to shift people away from the perceived safety of cash holdings.
The Cash Savings Challenge
According to Barclays data, approximately 15 million UK adults maintain cash savings exceeding £10,000 that they are unwilling to invest, while 13.4 million hold only cash ISAs. The TISA research found that targeted support prompted 53 percent of such savers to allocate money toward investments, suggesting this approach could serve as an effective tool for increasing overall investment participation.
Existing investors also benefited from the approach, with 14 percent increasing their investments, indicating that targeted support can assist investors who are unable or unwilling to pay for traditional financial advice.
Industry Perspectives and Implementation Challenges
Speaking at TISA's financial advice and guidance conference, Camilla Jessel, managing associate at Simmons & Simmons, noted that consumers with similar needs are beginning to question whether they need to pay substantial amounts for financial advice. The research also found that consumers became more willing to discuss their preferences regarding risk and loss, removing a common barrier that industry professionals typically encounter when discussing financial matters.
Sophie Legrand-Green, head of policy, consumer protection and access at TISA, emphasized that understanding what makes targeted support truly effective represents an important next step in improving the nation's financial wellbeing. She stated that focusing on attitudes toward investing, rather than broad demographic assumptions, can provide people with the confidence boost needed to become investors.
Navigating Regulatory Boundaries
While targeted support allows firms to address the rising use of AI among retail investors—which often provides unregulated advice—industry figures have cautioned firms to exercise care with their recommendations, describing the area as somewhat of a grey zone. Firms must balance providing helpful guidance without crossing into personal investment advice or violating regulatory guardrails.
Despite these challenges, industry experts remain optimistic that targeted support will help shrink the advice gap and become a fixture in the main retail market, potentially moving investors and savers away from speculative assets and unregulated online advice sources.
