Young adults invest more time and effort into their love lives than they do about their long-term financial goals, research from the Financial Conduct Authority (FCA) revealed.

They are also 18% more likely to be influenced by social media when it comes to making investment decisions, than when it comes to dating.

Compared to investors, daters looking for a life partner have a far longer outlook as just 2% of investors have a timeframe of more than five years in mind, while 14% have no timeframe in mind at all.

While investing and dating may not seem like the perfect couple, the FCA is looking at the parallels to encourage better investment decisions.

And next week, it will partner with Celebs Go Dating’s Anna Williamson to host the ‘Swipe left, invest right: How the principles of dating can be applied to investing’ event to encourage young investors to adopt the same mindset on their finances as they do when dating.

Red flags, emotion and hype

It comes as the higher interest rate and inflation environment has driven newer investors towards high risk, high return assets.

The FCA wants to highlight the importance of spotting the red flags, not letting emotions cloud judgement, and avoiding getting swept up in online hype.

Based on the survey of 1,000 18-40-year-olds, the FCA looked at how investors would react to a red flag on a date and when investing.

Potential red flags included a date being rude to the waiting staff and arriving late, to difficulty getting invested money out, or when the investment opportunity is only available for a short time.

It found men are more likely to continue with a date despite spotting a red flag (49% compared to 39% of women), and more likely to push on with an investment after identifying a warning sign (39% compared to 28%).

The FCA said ignoring red flags could put your money at risk, reinforcing why it’s so important to check investments are regulated and conducting thorough research to ensure they’re right for your circumstances.

Scrolling through a date’s social media was the most popular way to prepare for a date (57%), though a third said they were able to ignore hype on a potential match’s social profile. By contrast, only 20% were able to discount investment hype.

The FCA said avoiding hype on social media and focusing on investments that suit long-term goals and risk appetite will make for a “better investment journey overall”.

Temptation at every corner

Lucy Castledine, director, consumer investments at the FCA, said: “It can be an emotional rollercoaster, you’re trying to spot the red flags and hope the expectation lives up to the reality – and that’s just when investing.

“Our research shows young investors are putting more thought into their dating than their investing lives. Over the past year, we have seen the temptation of high-risk investments increase as consumers balance stretched household finances against the immediate thrill of a quick return. But this may mean investors are ignoring the red flags.

“We want to help investors re-think their approach by spotting the similarities to their own dating lives and applying the same mindset, thinking of the long term, doing their research and prioritising values that match theirs. We hope this will encourage a more mindful, confident approach to investing in the future.”

Laura Suter, head of personal finance at AJ Bell, said: “Investing is a complicated area, so it’s no wonder that lots of young investors are bamboozled by social media and end up taking too much risk.

“Despite many people creating glitz and glamour around investing, ultimately it should be pretty boring – particularly for first-timers. If you’ve just made your first investment you shouldn’t be on a rollercoaster ride of making (and losing) money, instead you should buy one or two well-diversified funds that will steadily rise over time.”

“First-timers who want to learn more about investing have a huge wealth of information available to them: a quick Google for ‘first-time investor guide’ will give you lots of options – just make sure it’s from a reputable source. While chatting to friends and family about investing is also a great idea, make sure you don’t take their recommendations too literally and that you do your own due diligence before handing over your cash.”