Rachel Reeves urges Brits to buy stocks as she shuns risk-averse regulators
Rachael Reeves has thrown her weight behind a campaign to get more Brits investing into stocks and shares as the Chancellor shunned the risk-averse culture of London’s financial regulators.
In a wide-ranging address to City execs at Mansion House last night, Reeves vowed to place financial services “at the heart” of the government’s growth agenda and touted the benefits to consumers of participating in the stock market.
“For too long, we have presented investment in too negative a light, quick to warn people of the risks, without giving proper weight to the benefits,” Reeves said.
“Our tangled system of financial advice and guidance has meant that people cannot get the right support to make decisions for themselves.
“We are united in wanting better outcomes for both savers and for the UK economy.”
Ahead of her speech, the Chancellor unveiled a campaign in which high street banks will alert customers about investment opportunities and offer support with moving cash from savings accounts into stocks.
Financial services giants backing the campaign include HSBC, NatWest, AJ Bell, Schroders, St James’s Place and Interactive Investor.
Long term asset funds, a regulated investment structure that enables funding in illiquid assets such as real estate, will be included in stocks and shares ISAs next year to give Brits a stake in infrastructure developments.
AJ Bell’s director of public policy described the idea as potentially “hugely powerful as a soapbox for shouting far and wide about the benefits of investing.”
Reeves urges lighter touch regulation
The Chancellor also unveiled a sweeping set of proposed changes to financial services regulation dubbed the “Leeds reforms,” under which regulators will be made to act faster and banks could be handed looser capital requirements, freeing up more funds to invest.
Reeves also took aim at the behaviour of financial regulators, urging them to “take up the call” of regulating for growth rather than “bend to the temptation of excessive caution.”
“We have been bold in regulating for growth in financial services and I have been clear on the benefits that that will drive,” the Chancellor said.
“As I look ahead it is clear that we must do more. In too many areas, regulation still acts as a boot on the neck of businesses, choking off the enterprise and innovation that is the lifeblood of growth.”
But Reeves stopped short of heeding calls from City brokers to cut the £20,000 limit to cash ISAs, a move which would have forced households with large cash savings into stocks and shares.
“We’ve left a generation on the sidelines, locked out not by choice but by inertia, complexity and outdated rules,” said Dan Moczulski, UK Managing Director of investing platform Etoro.
“Targeted Support is a start, but people need more than polite nudges from the high street.”
Reeves said she would “continue to consider further changes to ISAs,” adding she recognised the “differing views on the right approach.”