Authority supports campaign to boost consumer awareness
Investing in cryptocurrency based solely on a celebrity endorsement is being highlighted as an example of risky financial behaviour that investors should seek to avoid.
A global campaign that promotes the importance of consumer education and protection is this year focusing on crypto-assets, investor resilience, and sustainable finance.
The themes for World Investor Week (WIW) have been identified by the International Organisation of Securities Commissions (IOSCO) to reflect the challenges posed by the current financial climate.
The Isle of Man Financial Services Authority is once again supporting WIW by publicising tips and advice aimed at helping people to manage their money and protect themselves from financial harm.
The campaign, which runs from 2 to 8 October 2023, encourages the use of budgeting strategies to cope with unexpected events, and warns against falling victim to frauds and scams.
Investor education is being ramped up by international regulators and industry bodies, as high inflation and cost of living pressures lead some people to abandon prudent habits and indulge in riskier behaviour.
Protecting consumers is one of the Authority’s main objectives, complementing its work to reduce financial crime and maintain confidence in the Island’s finance sector through effective regulation.
The Authority’s website includes a section dedicated to consumer awareness that provides advice to help people manage their finances and safeguard themselves against bad practice.
It also explains the options available to consumers if they are not satisfied with a financial product or service provided by a regulated business.
Bettina Roth, Chief Executive Officer, said: ‘The Authority uses a range of different tools to promote consumer protection, including legislation, supervision, enforcement and education. Participating in World Investor Week helps to showcase the support that’s available to help people make informed choices about their finances. Market volatility and cost of living issues have emphasised the importance of education and protection. We want to help consumers future-proof their finances and avoid suffering the consequences of poor or hasty decisions.’
Key themes of World Investor Week 2023
Investor Resilience
A smart investor:
- Focuses on the impact of inflation on purchasing power and uses real rates of return to assess investment performance.
- Understands the way asset classes may behave in a persistent inflation environment and the impact on their attractiveness.
- Recognises the importance of diversification, especially with respect to protecting investments from losses from a single, unexpected event.
- Weathers negative financial shocks with an adequate emergency fund.
- Understands that risk exists in all investments.
- Plans for life’s unexpected challenges with budgeting strategies to manage risk, reduce the impact of inflation, and avoid high-interest debt.
Crypto-assets
A smart investor:
- Understands the investment products and risks that are associated with crypto-assets.
- Does not forget about the importance of due diligence when considering any investment opportunity, including crypto-assets.
- Recognises the warning signs of investment fraud.
- Never invests based solely on a celebrity endorsement.
Sustainable Finance
A smart investor:
- Realises that sustainable finance may be referred to in many different ways, such as environmental, social, and governance (ESG) investing, socially responsible investing, and impact investing.
- Reviews an investment’s disclosure documents to see how it weighs various ESG or sustainable finance factors.
- Considers whether an investment’s stated approach to sustainable finance matches the investor’s investment goals, objectives, risk tolerance and preferences.
- Understands that each sustainable finance investment opportunity is unique, and should be evaluated on its own terms.