The Risk Warnings Review, commissioned by the Chancellor as part of the Leeds Reforms and undertaken by industry, government and regulators, has today published its final report – ‘Supporting a New Retail Investment Culture’. The report sets out how investment risk can be communicated more effectively so consumers can make properly informed decisions.
With the lowest rate of personal investment in the G7 and large numbers of people holding cash savings, the report supports the new direction of the UK’s investment risk culture and is part of the wider collective effort of government, industry and the regulator to help more people harness the benefits of investing to achieve their long-term goals,
The landmark report recommends a series of practical changes, including moving away from the widespread use of standardised risk warnings. It observes that these are either widely misunderstood by savers, deterring their engagement with long-term investing, or frequently ignored by seasoned investors.
Drawing on a range of evidence, including research commissioned by the Review and conducted by The Wisdom Council and Boring Money (published today), the report also found that simple and accessible explanations of how investments can rise and fall, presented alongside relevant benefits and explicit time horizons, are seen as more likely to encourage positive actions, including starting to invest.
Alongside the final report, the Risk Warnings Review also today publishes ‘Practical Guidance for Firms‘, setting out steps firms can take now to improve how risk is communicated in mainstream investment promotions. This includes moving away from routine use of “capital at risk” as a default and focusing on information that meets consumers’ needs, prioritises comprehension and supports effective, timely and properly informed decisions around risk and reward.
Chris Cummings, Chair of the Review and Chief Executive of the Investment Association, said: “This Review marks an important turning point in how we talk about investing in the UK. For too long, well‑intentioned rules and industry caution have resulted in warnings that overwhelm rather than inform, discouraging people from taking the long‑term decisions that could strengthen their financial resilience. Our findings show a clear path forward – one where firms can communicate risk in a way that is balanced, contextual and genuinely helpful for consumers.
“In the months ahead, we will support firms to put the recommendations into practice, deepen our engagement with the FCA and industry partners, and continue testing what truly works for savers and investors. By embedding more effective risk communication across the consumer journey, alongside the upcoming Retail Investment Campaign, we can help build a healthier investment culture. Together, both projects will enable more people to feel confident in investing, participate in the growth of the economy and secure better long‑term outcomes for themselves and their families.”
Sarah Pritchard, Deputy Chief Executive of the FCA, said: “We want to see a stronger investment culture in the UK, so consumers are better supported in navigating their financial lives. Consumer confidence underpins a strong investment culture and confidence comes from clear, balanced information about the potential rewards and risks.
‘We welcome the review’s push to make the way risk and reward is communicated clearer to consumers, rather than a tick box exercise.
“We will continue to support this work and look forward to seeing the difference the review makes alongside our new rules on targeted support which should help millions make financial decisions.”
Claire McAlees, Senior Financial Promotions Compliance Manager at Hargreaves Lansdown & Chair of the Technical Working Group, said: “I am proud of the deeply collaborative effort that has gone into translating the Review’s ambition into practical guidance for firms. This work has been grounded in a clear principle: risk communication is most effective when it reflects how consumers actually read, interpret and act on information, not how the industry assumes they should.
“The Review’s findings, which were supported by research from Hargreaves Lansdown, show that standardised, loss-focused warnings are too often misunderstood, ignored, or even deter long-term investing, whereas clearer, more contextual explanations are more likely to be understood and trusted. The guidance helps firms move away from formulaic wording and towards more meaningful communication. It encourages firms to explain risk in a way that is proportionate, relevant to the product and aligned with consumers’ long-term objectives.
“By focusing on comprehension, timing, and real-world decision-making, firms can practically support informed and confident investment decisions, while maintaining strong standards of consumer protection.”
Recommendations to ensure long-term clarity in investment risk communication from the report include:
- Amend the FCA’s financial promotion rules – specifically Conduct of Business (COBS 4) – to support clearer, more contextual explanations of how investment risk works in practice.
- Reform the standalone compliance principle to enable plain‑language explanations of risk and reward across the consumer journey, rather than formulaic repetition, and to better align supervisory practice with outcomes‑based regulation.
- Ensure that the impact of current guidance and any future reforms is reinforced through consistent application across supervision, enforcement and dispute resolution, including closer alignment between FCA policy, supervisory expectations and Financial Ombudsman Service decisions.
- Encourage ongoing collaboration between industry and regulators in achieving shared objectives of more effective risk communication.
Anna Lane, CEO of The Wisdom Council, said:
“In over a decade of talking to customers about long-term savings and investments, The Wisdom Council (TWC) have been all too aware that perceptions of risk are a major barrier for potential investors. When customers ask about the risks associated with a product, what they really mean is ‘will I lose all my money’? As an industry, we have been adept at reinforcing this negative framing. TWC welcomes the shift towards greater balance in communications, informing rather than warning. We are proud to have brought an important customer perspective to the project and look forward to working with the industry as they implement the Investment Association’s guidance.”
Holly Mackay, CEO & Founder of Boring Money, said:
“For too long, risk has been the 4-letter word of investing. It’s regularly cited as the main barrier to investing by those who keep everything in cash – 50% say this is the main reason they don’t invest, up from 42% in 2025. Too many people keep their long-term savings in cash and are closed to the concept of investing, whatever their timeframes. Over 4 in 10 cash-only savers today say they would never consider investing in shares.
“These changes enable a more informed conversation with consumers which presents a much more balanced view of how cash and shares are both important parts of a balanced long-term financial diet.”
Steve Gazard, chief distribution officer at Quilter, added:
“It is vital for the personal finances of this country that we help consumers move from a culture of saving to one of investing where possible. The opportunities that the Advice Guidance Boundary Review and Targeted Support can bring, alongside the public awareness that the Retail Investment Campaign, will begin to stimulate some of that change.
“However, for those things to have a chance of succeeding in their aims, we can’t then put people off with old fashioned, static and compliance led risk warnings. This is why the work of the Risk Warnings Review from the IA is so important. These recommendations will allow the industry to move to more engaging and understandable disclosures inserted in the right place in the customer journey.
“Furthermore, we are very much now a digital first world and therefore it is as much about how risk warnings are presented to customers, as it is about what they say. This review should lead to firms having the scope to be much more creative and engaging in the ways they talk about risk, and effectively present the positives and potential drawbacks of investing and how it differs to cash saving.
“Ultimately, we are supportive of the recommendations the review has produced, and it gives practical guidance to firms to adopt, alongside ensuring a supportive regulatory environment where firms can operate with confidence. We do not see a repeat of prescribed phrases that the industry previously defaulted to.”
James Heal, director of public policy at St. James’s Place, added:
“The updated guidance should give firms greater confidence to talk about investing in a way that is clear, proportionate and genuinely focused on consumers. It supports a more balanced approach to risk disclosures, including reducing the use of risk warnings where they add little value. It also makes clear that explaining risks in a way that helps consumers understand their nature and likelihood is permitted because it does not amount to diminishing those risks.
“Our recent behavioural science report into retail investing showed that small changes in how investing is communicated can have a meaningful impact on confidence and willingness to invest. This new guidance should lead to better quality communications that inform rather than deter, helping more people to engage with investing in a considered way that supports their long-term financial resilience.
“We welcome the FCA working with industry to deliver this guidance and, alongside other initiatives such as the Retail Investment Campaign, this is an important step towards fostering a healthier investing culture in the UK.”
