The City’s regulator has warned providers of investment apps to review the game-like features some use to lure customers to buy investments.
As exclusively revealed in last week’s Wealth & Personal Finance section, the Financial Conduct Authority is increasingly concerned that app users are buying investments they don’t really understand – and are being hooked in by the gamification of the products.
Worry: The FCA is increasingly concerned that app users are buying investments they don’t really understand – and are being hooked in by the gamification of the products
These include points, badges and celebratory messages when they make trades.
Many younger investors are drawn to such apps in the hope of making quick returns.
On Friday, Sarah Pritchard, FCA executive director of markets, told The Mail on Sunday: ‘Some features could be contributing to problematic, even gambling-like, behaviour. We expect all firms to make improvements to products.’
Research by the regulator indicates that trading apps ‘sometimes play a role in driving poor outcomes for consumers’ and are fuelling ‘problem-gambling’.
It says of five apps it researched, nearly half of users on two of the apps were investing ‘potentially beyond their risk appetite’.
Major trading app providers include eToro and Revolut. Both told the MoS that they ensure new investors understand the risks associated with trading.
