Investment industry sets out how to maximise industry and government collaboration for growth

The Investment Association (IA), the trade body for the UK investment management industry, has written to Chancellor Rachel Reeves to outline how the sector can support the new government in its ambition to kickstart growth in the UK. 

The IA’s 250 members manage £8.8 trillion of assets in the UK, helping households to secure their long-term financial futures and channelling much needed capital into UK companies and infrastructure projects. The letter sets out three focus areas where the new government and investment management industry can work together to deliver growth:

• Channelling productive capital into more thriving British companies and infrastructure projects;
• Building financial resilience by enabling more people to invest to secure their future;
• Ensuring that more high value investment management business is done here in the UK, providing highly skilled jobs and keeping the UK investment management industry a global success story.

The IA has proposed a number of urgent measures which will maximise the industry’s ability to drive financial returns for savers and efficiently allocate capital, whilst striking the right balance between consumer protection and appropriate risk. Key policy asks include:

1. The government must help to make investing more inclusive by supporting rapid progress on the review of the advice/guidance boundary and modernising disclosure rules. These measures will help to ensure that retail investors receive clear, transparent and accessible information about financial services and products.

2. Pension incomes must be supported through a robust Pensions and Retirement Savings Review, considering how to appropriately increase contribution levels and optimise investment returns to ensure people get the best outcomes in retirement. Pension trustees must start to consider value and the opportunities for growth when selecting schemes, in addition to simply looking at headline costs.

3. Public markets must be reinvigorated through listing regime reform that increases the UK’s global competitiveness and drives more high-quality IPOs that generate good jobs across the nation, and improved access to market data, to better fuel and encourage decision-making for traders, investors and policymakers.

4. Investment in private markets must be facilitated by increasing the pipeline of investable infrastructure projects and opening the doors to technology which will allow more people to invest directly into growing companies and infrastructure projects.

5. Investment managers must be supported in funding the transition to Net Zero, through genuine partnership between the public and private sectors to develop a strategic approach to investing in the industries of the future.

Chris Cummings, CEO of the Investment Association, commented: “We strongly support the new government’s ambition to drive economic growth and build the financial resilience of households up and down the country. The UK investment management industry is a global success story, has given us a powerful voice in financial services issues on the world stage, and attracted high quality jobs and opportunities to the UK.

“We look forward to working closely with the new government to achieve these goals, and in particular in supporting the imminent Global Investment Summit as an important way to signal Britain’s openness to trade. 

“There is more our industry can do to boost the UK economy and support its people. Investment is the key to unlocking growth. We must act to channel more capital into thriving British businesses and infrastructure projects and to create a nation of confident investors that understand the value of investing their money safely and for the long-term. We must find the right balance between risk and safety across the system, and between necessary change and the stability needed for long-term decision-making.”