The majority of people have no risk appetite at all when it comes to investments, the latest research by the FSA shows.
The FSA Consumer Awareness Survey 2011 also reveals almost one-in-five people received some form of financial advice in 2011.
According to the poll, 61 per cent of respondents are not willing to take any risk with their investment. Only 4 per cent of the 2,063 people taking part are prepared to take more risk in the hope of securing higher returns.
According to the regulator, consumers have become “slightly” more risk averse since similar research was carried out in 2010.
The number of people not willing to take risk with investments increased by three percentage points over last year, while those prepared to accept more in pursuit of returns has dropped by two percentage points.
“This is not surprising given the uncertainty surrounding financial markets,” the FSA says.
The survey also shows people who own shares directly are the most likely to take risks to gain higher returns, with 8 per cent putting themselves in this category. Some 7 per cent of those with unit trusts, equity Isas or personal equity plans have a higher risk appetite.
In addition, the poll reveals that 17 per cent of respondents have received professional advice about a financial product in the past 12 months, with 47 per cent of these using an independent financial adviser. Some 41 per cent saw an adviser at a bank or building society, while 12 per cent got guidance from other sources such as accountants or solicitors.
“It is important that when people receive financial advice it is appropriate to the individual’s circumstances and they have confidence and trust in the advice received,” the FSA says.
The regulator’s research shows 61 per cent of those who sought advice from an IFA are very confident it was appropriate to their circumstances, while 30 per cent are fairly confident.
Looking at banks and building societies, 33 per cent of consumers are very confident this source was appropriate for them and 55 per cent are fairly confident.