IA calls for Budget to boost UK's position as world leader in financial services

Investors are urging the Chancellor to deliver a Budget on 15 March that squarely boosts the UK as the world leader in financial services in an increasingly competitive global landscape.  

The Investment Association (IA) is calling on the Chancellor to announce measures that will allow investment managers to capitalise on international opportunities, strengthen the industry’s ability to support growth in the economy and help the three-quarters of UK households who use the services of an investment manager secure their long-term financial futures. This includes:

• Building a competitive regulatory system that allows investment managers to support the wider economy, funnelling capital into growing businesses and helping savers meet their long-term saving goals. Parliament will soon give regulators a new objective to promote competitiveness and foster economic growth and it is imperative this is seized and implemented effectively if the UK’s waning attractiveness is to be reversed. A hallmark of future regulation should be to secure the UK’s place as the global leader in innovation which directly supports investment in high growth companies and brings new services to retail savers and investors.
• Securing green finance leadership, with the double dividend of both attracting economic activity to the UK and playing an ever more important role in mitigating climate change. This budget should support the work in the expected Green Finance Strategy, setting out how the wider government can mobilise private capital to support green growth.
• Supporting innovation in technology, which will help to provide a world-leading service to investors by cutting costs and improving both service and investment returns. The IA is calling for a regulatory framework for tokenised funds to operate in the UK and have asked government to establish a Decentralised Finance (DeFi) Taskforce to help realise the opportunities available in this space and consider safe routes for investors to hold cryptoassets.
• Reviewing financial advice and guidance regulation, helping people to plan for later life. Millions more people in the UK would benefit from accessing the long-term returns that investing brings, which are important in helping them to achieve their savings goals and prepare for a more prosperous later life. We are calling for broadening access to simplified advice for those with less complex needs and widening financial guidance to help those who are already investing, supported by a new approach to regulatory disclosure so that it focuses more on engagement and modernises the current inefficient paper-based systems.
• Re-energising public markets, widening both businesses’ access to long-term pools of capital, and seeing robust governance that will help deliver long-term returns. The IA has supported the Hill and Austin Reviews, but now is the time to go further and consider the wider listings ecosystem and how this can shape the decision of companies which are considering floating here including the complexity of the listing requirements, the advice they receive from their bankers and lawyers and valuations at the time of IPO in the UK market. 

Chris Cummings, Chief Executive of the Investment Association, said:

“The UK faces a real danger of losing its place as the leading centre for international investment management, and with it, the benefits this brings for the whole economy. Our industry plays a truly critical role in bolstering the UK’s economy by supporting growing businesses and allowing people to plan and prepare for the future, yet other countries are building regulatory systems which better support savers and businesses looking for capital.”  

“In the Budget, the Chancellor must deliver measures that underpin the UK’s competitiveness by building a strong regulatory framework, which ultimately drives growth and ensures financial resilience. A focus on the innovation agenda and supporting the transition to a greener and more sustainable economy are also key. This will allow the UK to maintain its role as a world-leading hub, and importantly enable our industry to protect and benefit the tens of millions of people that we serve across the country.”

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