How do risk warnings impact investment choice
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How do risk warnings impact investment choice

March 2024

The findings of this research are striking: if you can help people to better understand the risks of investing in stocks and funds, they are more likely to invest. This is because many individuals perceive the probability of making losses from equities to be higher than it often is. Improved messaging can help. In this study, highlighting the higher returns that can be achieved over time from mainstream investing leads to a c.14% increase in the amount invested.

Standard risk warnings for mainstream investments are not doing the job of helping people make an informed decision about the risk and reward trade-off and how it fits with their wider financial goals. They are routine and offer little by way of meaningful information: “The value of investments can fall as well as rise. There is a chance you might not get back what you put in.” Such a statement doesn’t do enough to help consumers evaluate different types of investment risk – the statement reads as true for gambling as it does for investing in a managed fund within a Stocks & Shares ISA. Nor do current risk warnings help consumers make the mental trade-offs that are inevitably required when deciding which product might help them meet their financial goals.

The balanced risk warnings we formulated and tested provide context and draw attention to the historically higher potential returns offered by stocks, shares and funds when invested over longer periods of time.


Changes to risk warnings could result in nearly 14% more cash being invested by the public.

  • Research by TISA and the University of Nottingham shows that providing balanced, contextualised risk warnings resulted in an approximately 14% increase in cash invested in Stocks & Shares.
  • Women responded by increasing their investments the most, so reformulated risk warnings could help close the gender investment gap.
  • This is part of a broad industry Inclusive Investing campaign convened by TISA to encourage savers to invest.

These were the findings of large-scale randomised control trials by The Investing and Saving Alliance (TISA) in collaboration with the University of Nottingham. In the trial, participants were asked how they would hypothetically allocate £10,000 between cash savings, stocks and funds.


TISA launches Industry-wide Inclusive Investing Initiative at Parliament

TISA and industry partners have launched a wide-ranging Inclusive Investing initiative to make investing more accessible and equitable for all individuals at an event on the Parliamentary Estate, with endorsement from Nadhim Zahawi MP and Lord Vaizey of Didcot.

Building on previous research (available here), TISA aims to counter the broad investment gap which exists in this country. With women, those outside London and people from a wide range of other demographics keeping more of their assets in cash and investing less in Stocks & Shares ISAs.


Carol Knight, CEO at TISA, said: “Financial wellbeing for all is at the heart of TISA’s mission. Statistics show a widespread investment gap, particularly affecting women and minorities as well as residents of UK regions outside London and the South-East. This needs to be urgently addressed.”