Swedish Financial Supervisory Authority publishes guidance on avoiding behavioural traps when saving and investing

The Swedish Financial Supervisory Authority published consumer guidance on common “thought traps” that can lead savers to choose unnecessarily expensive products, take on excessive risk, or avoid investing altogether. The guidance highlights four patterns: being overwhelmed by too much choice and therefore not choosing any product, overestimating one’s own ability and investing in high-risk complex products, assuming a higher-fee fund is better even though high fees do not necessarily mean higher returns, and anchoring fund comparisons to an unusually expensive fund. It recommends narrowing the universe to simple options that suit most consumers such as broad, low-fee funds, warns that cryptoassets and structured products are unsuitable for most due to complexity, high fees and often high risk, and suggests making broader fee comparisons such as checking median fund fees.