The regulator has launched an £11m InvestSmart campaign targeting new and inexperienced investors. It found that 76% of those aged under 40 who have invested in high-risk products such as cryptocurrency and forex say they are driven by competition with friends, family and acquaintances and their own past investments.

More than half (58%) said hype on social media and in the news lay behind their investment decisions. More than two thirds (68%) likened it to gambling and only a handful of those surveyed were investing for the long haul.

Just one in five (21%) respondents were considering holding their most recent investment for more than a year, and less than one in 10 (8%) for more than five years.

The FCA found that hype on social media and in the news is driving new investors to take up high-risk investments. More than half (58%) of respondents agreed that constantly hearing about a certain investment on the news, on social media, and from other people encouraged them to purchase specific investments.

The regulator is concerned that new investors are increasingly accessing higher-risk investments which may not be right for them, or reflect their risk tolerance. It found that the majority of those who purchased forex or crypto (57% and 69% respectively) incorrectly believed these to be regulated by the FCA. As a result, they were unlikely to understand the lack of investor protection and the risk to their money.

Sarah Pritchard, executive director of markets at the FCA, said: “We are seeing more people chasing high returns. But high returns can mean higher risks. We want to give consumers greater confidence to invest and help them to do so safely, understanding the level of risk involved.”

Holly Mackay, Boring Money CEO, said: “Half of all investors under 35 have been an investor for less than three years. They have cut their teeth in a period of tech-fuelled growth, with huge volatility and a crazy side dish of bitcoin and meme stocks.

“The growth in investing is fantastic but we have a hell of a job to do in helping newer investors to make sure they have some more traditional, boring, diversified stuff along with the more spicy bits.

“We can either react to the increase in social influencers by tutting. Or by responding to the challenge and actually spending decent time and money on fixing the massive engagement challenge we face.”

Moira O’Neill, head of personal finance at Interactive Investor, said: “This research amongst higher-risk young investors chimes with broader research conducted by interactive investor in June amongst the general population.

“We found that a fifth of all 18 to 29-year-olds said they had invested in Bitcoin at some point, with half of these turning to a cocktail of debt to fund it.

“But when it comes to risk, we are seeing some extremes amongst younger age groups. With a 10-year horizon in mind, our research has found that cash was considered the best home for the biggest chunk of savings (20%) amongst 18 to 29-year-olds, followed by cryptocurrency (16%), shares (14%), funds (11%) and investment trusts (8%).”