Mr Polson is on holiday again and for the second time, I’m taking the TCWU reins amid a Twitter ruck. The Sunday Times’ Ali Hussain wrote an article about life insurance, followed it up with a couple of scathing tweets about the value of life insurance and financial advice and then all hell broke loose. Citywire’s Laura Purkess has the full story here.

On the plus side, the debacle has unified the advice profession in its defense of the value of life cover and protection insurance. But it’s also brought out some nasty keyboard warriors, attacking Ali himself rather than his arguments. We’re better than that, as proved by Phil Bray who initiated a Twitter thread for advisers to share their stories about the positive difference insurance made when the worst happened. These stories bring home the importance of getting the right cover for your personal circumstances. Here’s hoping we can continue to unite in promoting the positive reasons for seeking advice.

PROTECTING PEOPLE FROM THEMSELVES

One important reason for taking regulated financial advice is the rules in place to ensure recommended investments are suitable for the individual. Investing in cryptocurrency offers no such protection, but lately it’s hard to move without someone talking about the pros and cons for retail investors. In the last few weeks, investing in crypto has been covered by the FT Money Clinic podcast and on daytime TV’s Steph’s Packed Lunch. The FCA also published research estimating that 2.3 million adults hold cryptocurrency. Although 30% said they bought cryptocurrencies as part of a wider investment portfolio, 19% bought them as an alternative to mainstream investments, 17% see them as a way of making money quickly and 14% borrowed money for the purchase.

The UK Regulator – like many others around the world – is desperately trying to play catch up with this increasing consumer interest. Since January, retail cryptocurrency derivatives trading has been banned in the UK and all firms offering crypto assets must be FCA registered and comply with anti-money laundering rules. In March, the FCA warned younger investors about the high level of investment risk they are taking. And this week, it banned Binance, one of the world’s largest cryptocurrency exchanges, from conducting any regulated activity in the UK. The Bank of England’s Andrew Bailey said publicly that you should only buy cryptocurrencies “if you’re prepared to lose all your money”.

But is it making any difference? The continued hype around crypto is so big that some people seem hell bent on buying it despite the warnings – or maybe even because of them: the FCA’s research found that some recent buyers said consumer warnings, rather than putting them off, had actually triggered them to find out more or to purchase cryptocurrency. Sam, the case study on the Money Clinic podcast, doesn’t have an ISA or a pension and put all his savings into cryptocurrencies after learning about it on YouTube. He says he’s never been told anything about mainstream investing and it’s easier to find out about cryptocurrency, adding, “Having more control over your money and the bankers having less control over it, that’s exciting.”

In this anti-establishment environment, how is the Regulator going to reach a new generation of investors who are picking up investment tips from YouTube, Twitter and TikTok? How are advisers for that matter? Warnings about high-risk investments are all very well, but maybe we also need to think about how and why potential investors are making decisions and find ways to reach them with mainstream investment success stories in a language and format that appeals to them.

PROTECT YOUR LINKS

Mark will be back from holiday next week.

Jenette