Viewpoint: The retail investor should not be ignored

Tim May

CAN any company which relies on the custom of the public ignore them when it floats on the market? Certainly it seems wrong to deny your customers a chance to share in your company’s fortunes.

The current resurgence of initial public offerings in the London market is certainly welcome. But it isn’t good news for everyone. The UK’s corporate advisers are consistently overlooking the country’s four million retail investors as they make arrangements for company flotations.

Well-recognised, customer-facing brands such as Foxtons, Poundland, AO and now Just-Eat are floated on the markets without individual investors getting a look-in. It is all a far cry from the 1980s and 1990s when we spoke proudly of a nascent shareholder democracy.

It is hard not to be cynical when you see corporate advisers making the current offers available only to fellow institutions. Individual shareholders are good for companies and good for the economy. They are typically investors, not speculators – they tend to be longer-term holders of shares.

That of course is one of the reasons why the government ensured a sizeable tranche of Royal Mail shares were made available to individual investors last October.

We have asked the chancellor to use his Budget to announce a review of how companies go about seeking finance in the markets, and how individual investors can get involved. There is more that can be done.

Dr Tim May is chief executive of the Wealth Management Association

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