Britain’s high-risk investors were not mostly beginners, FCA-based study found

UK adults investing in high-risk products were more likely to be seasoned participants than newcomers, according to a new TradingPlatforms.co.uk analysis of the FCA Financial Lives 2024 survey. The report found that 44% of cryptocurrency holders had first invested three or more years ago, while only 10% had less than one year of experience. Among CFD traders, the pattern was even more pronounced: 46% had been active for at least three years, compared with just 16% who had less than a year of experience.

That undermines a common assumption that the riskiest corners of retail finance are dominated mainly by inexperienced first-timers. TradingPlatforms.co.uk said the majority of people engaging with high-risk financial products often do so over extended periods rather than briefly dipping in and out. In both crypto and CFDs, the long-experience cohort comfortably outweighed the least experienced group, suggesting that many participants who stay in these markets do so despite already having had several years to understand the volatility and potential downside involved.

This pattern becomes more interesting when set against the report’s wider findings on participation. Overall appetite for high-risk products has fallen, with only 8.4% of investors choosing them, and only 4.3% of UK adults holding cryptocurrencies while 0.7% traded CFDs. In other words, the market for high-risk products appears small and shrinking, but the people who remain active in it are not predominantly novices. That gives the sector a very different profile from the stereotype of a constant wave of brand-new punters chasing quick wins.

The findings suggest that the UK’s high-risk investor base may be smaller than often assumed, but that many of those who participate are not newcomers. Within this group there is a sizeable number of investors with several years of experience in products such as cryptocurrencies and CFDs. That does not reduce the risks involved, but it indicates that some participants remain active in these markets over long periods rather than treating them as short-term experiments.