The UK Financial Regulator’s Advertising Strategy: Reaching Beyond Dumb Money

The UK Financial Regulator’s Advertising Strategy

Reaching Inexperienced Investors

The Financial Conduct Authority (FCA), the UK‘s financial regulator, has recently embarked on a new marketing strategy aimed at reaching younger, more inexperienced investors. As part of this strategy, the FCA has taken the gold spot (the last commercial message before the main feature) at cinemas showing the film “Dumb Money,” which chronicles the 2021 GameStop short squeeze. The FCA’s bespoke advert warns inexperienced investors about socially hyped stocks and aims to educate them about the potential risks involved.

Emma Stranack, head of consumer engagement, content, and channels at the FCA, explains that the GameStop episode is a perfect example of speculative investment driven by hype, with many inexperienced investors suffering losses. The FCA saw the film as an opportunity to reach its target audience and raise awareness about the risks associated with such investments. The advert highlights the experience of being caught up in the hype and the potential consequences of uninformed investing.

Making Use of an Opportunity

The decision to advertise before screenings of “Dumb Money” came about when a few people at the FCA saw trailers for the film and recognized its potential to resonate with their target audience. The FCA took the gold spot, ensuring that their advert would be the final commercial before the film. The minute-long spot starts with a blank screen and a voiceover pitching a new investment opportunity, then reveals that it’s just someone posting in an online forum. The goal is to create an immersive experience that mimics the themes of the film.

The advertisement will run for five weeks at popular cinema chains, including Odeon, View, Cineworld, and Pearl and Dean. In addition to cinema advertising, the FCA also employs geo-targeting to reach potential investors who are searching for investment opportunities. These individuals will be served out-of-home ads in the cinema foyer. The media buy for the campaign was handled by Manning Gottlieb and OmniGov.

Aiming at Younger Investors

The “Dumb Money” placement is part of the FCA’s long-term InvestSmart campaign, which targets younger investors. The FCA witnessed a surge in investing during the pandemic lockdowns, driven in part by increased disposable income and a shift to online investment platforms. This resulted in a new audience of inexperienced investors who are more prone to making emotional investment decisions based on social media influence and hype.

According to FCA data, 45% of these less experienced investors were unaware that losing money was a risk, and 59% would be unable to afford a loss. The FCA refers to this segment as “having a go,” driven by gut instinct and without conducting thorough research. To reach these investors, the FCA has expanded its advertising efforts beyond traditional channels, including TikTok and Reddit. The FCA also collaborates with “finfluencers” to disseminate information and education about investing.

Positive Early Results

The FCA’s strategy shift has shown promising early results. Investors who have been exposed to the FCA’s campaign have demonstrated an increased inclination to conduct research, seek advice from reputable sources, and visit the FCA website. According to the FCA’s tracking survey, 24% of consumers stated they would be more careful and conduct research to reduce the chances of losing money in high-risk investments. They also showed a 24% increase in the likelihood of learning about investing from reputable information sources, including the FCA website.

Emma Stranack emphasizes that the FCA’s marketing investments have the full support of the organization’s executive leadership. The FCA sees marketing as a regulatory tool to empower consumers and ensure they can enjoy investing without suffering significant losses. The FCA recognizes the need to adapt its messaging and reach investors where they already are, rather than hoping they will seek out information from the regulator directly.

Editorial and Advice

Educating and Protecting Investors

The FCA’s decision to advertise before screenings of “Dumb Money” is a commendable effort to educate and protect inexperienced investors. The GameStop short squeeze demonstrated the potential dangers of speculative investments driven by hype, and the FCA is seizing the opportunity to raise awareness and provide guidance. By reaching these investors in a context that resonates with them and using immersive advertising techniques, the FCA aims to make a lasting impact.

A Shift towards Holistic Investor Education

The FCA’s broader InvestSmart campaign and its adoption of non-traditional advertising channels reflect a necessary shift in investor education. Younger investors, especially those who are new to investing, need targeted and accessible information to navigate the complex financial landscape. Recognizing the influence of social media and online platforms, the FCA has wisely embraced these avenues to reach and inform these investors.

Continued Adaptation and Collaboration

The early positive results of the FCA’s marketing efforts demonstrate the effectiveness of adapting to the evolving needs of investors and collaborating with influencers and reputable sources. The FCA’s commitment to continuously monitoring and adjusting its strategies ensures that its messages remain relevant and resonate with the target audience. This dynamic approach is vital to combat the risks associated with uninformed investing and protect investors from making costly mistakes.

Support from Executive Leadership

The FCA’s marketing investments receive full support from the organization’s executive leadership, which recognizes the value of marketing as a regulatory tool. This endorsement helps empower the marketing team to innovate and develop new strategies to effectively reach and educate investors. This level of support demonstrates the FCA’s commitment to consumer protection and its understanding of the role marketing plays in achieving that goal.

Consumer Responsibility

While the FCA’s efforts are commendable, it is crucial for investors to take responsibility for their financial decisions. The FCA can provide education and warnings, but ultimately, individuals must conduct thorough research, seek advice from reputable sources, and make informed investment choices. Being aware of the risks and remaining diligent in their decision-making process is essential for investors to protect themselves from potential losses.