Consumers misjudging product risk levels

Scott Sinclair
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An alarmingly high number of consumers do not know how to risk-rate standard financial products, such as equity ISAs and with-profits bonds, research suggests.

According to a study conducted on behalf of the FSA, 26% of more than 2,064 individuals did not know whether to categorise equity ISAs as low, medium or high risk. Three in ten did not know how to categorise with-profits bonds, while 16% did not know where to place direct investment in shares. Meanwhile, 37% of respondents said they believed residential property investment represented little or no risk, while a similar number thought it represented a medium risk venture. Less than half (45%) said they believed direct investment in shares was high risk. The Consumer Awareness Sur...

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