If Rachel Reeves’ first Mansion House speech is anything to go by, things are about to get a lot more interesting for wealth managers. The Chancellor’s making it clear she wants to shift the dial, from a post-crisis mindset focused on risk and red tape, to one that encourages investment and growth.
There’s talk of scaling back regulation, tweaking the powers of the Financial Ombudsman, and giving retail investors a bigger push towards the markets. On top of that, there’s renewed momentum behind the Mansion House pensions agenda and getting more capital flowing into UK assets, including private markets. It’s a bold move—and one that’s already got the industry talking.
Liz Field, Chief Executive at PIMFA, said:
“We welcome the government’s commitment to simpler, stabler and more predictable regulation at the heart of its new Financial Services Growth & Competitiveness Strategy. In a recent report we published alongside UK Finance and KPMG, senior stakeholders across private banking and wealth management consistently highlighted the need for this to happen, in order to unlock the sector’s enormous growth potential.
“Alongside the commitment to reducing the regulatory burden, we are pleased to see a focus on enhancing consumer confidence, as well as helping more people move from cash savings into long-term investments, areas where our sector plays a vital role.
“The Government’s commitment to reforming how the Financial Ombudsman Service (FOS) operates represent a significant step in the right direction, maintaining consumer protection whilst also providing firms with the certainty and clarity needed to invest, grow and innovate.
“Today’s reforms send a clear signal that the UK is serious about harnessing the strengths of its financial services sector to drive growth, innovation, and prosperity. The Private Banking and Wealth Management sector can play a crucial role in delivering the growth and stability we all want to see. We look forward to continuing to work with Government and regulators to ensure that implementation of these reforms delivers tangible benefits for firms, clients, and the wider economy.”
Paul Joyce, Partner at LAVA Advisory Partners, said:
“In a world that’s becoming increasingly protectionist, it’s nice to see a government open its arms to the world and say, “Welcome.” After the Chancellor’s Mansion House speech, it’s absolutely right that the UK prioritises growth at this point in the cycle, and taking a more pragmatic approach to regulation is the right way to do it. The financial services industry has taken the brunt of the blame and pain post-financial crisis (and in some respects rightly so!), but now is the time to take a more balanced approach to regulation and oversight so we can get back to encouraging firms to be entrepreneurial and positive.
“We’re seeing a lot of capital coming out of the US, looking to invest in Europe, so why not take the opportunity to entice that capital into the UK? We were told that one of the much-heralded benefits of Brexit was the ability to differentiate ourselves from the EU, and this is an example of the government actually seizing the initiative and looking to deliver on that promise.
“Could they go further? They need to be careful not to go too far the other way and throw the baby out with the bathwater, but perhaps encouraging asset managers—particularly US private equity and venture firms—into the UK might also boost investment in entrepreneurial UK companies and give them the capital to take on larger businesses and grow internationally themselves.
“There’s an opportunity to create a virtuous circle of investment, growth, and employment in the UK economy, which should help start to boost GDP and bridge the spending gap. Hopefully, this is the government’s first step on that journey and the start of a more positive outlook for the UK economy and the financial services sector.”
Dr Andrew Williamson, Managing Partner at Cambridge Innovation Capital, said:
“The reforms put forward by the Chancellor at Mansion House have the potential to supercharge the UK’s £10bn science and technology ecosystem, provided they are implemented correctly. The growing commercial maturity of Britain’s technology companies provides a robust and accessible route into long-term, risk-adjusted returns for institutional capital.
“US and Canadian pension funds have benefited from this strategy, and the UK is now poised to capitalise on this generational opportunity. The Chancellor’s reforms rightly aim to align the long-term horizons of the pension and venture capital industries, which will help to unlock capital for long-term innovation while strengthening future pension outcomes for savers.”
Chris Cummings, Chief Executive at the Investment Association said:
“The Leeds Reforms bring together an ambitious programme for financial services reform, which aims to modernise capital markets, cut regulatory red tape and broaden the benefits of investing to more people across the UK – in turn delivering investment-led growth and improved financial resilience for UK households.
“We called on the government to undertake bold reforms to strengthen the UK’s retail investment culture and they have done so. We’re proud to be the Secretariat for the industry-led campaign to raise awareness of the importance of investing to peoples’ future financial wellbeing. Better communication of the returns investing brings is key if we’re to empower more people to invest.
“The review of risk warnings is a welcome move to shift the conversation from warning to informing and we are pleased to have been asked by HM Treasury to spearhead this initiative. We’re also extremely pleased that Long-Term Asset Funds will now be incorporated into the Stocks and Shares ISA – a reform we have long called for. Broadening access to the private markets through the LTAF will enable people to further diversify their investments and benefit from the long-terms returns provided by this asset class.
“Cutting red tape to attract investment and drive growth will help ensure the UK remains a world-leading centre for investment management, in particular the reforms to the Financial Ombudsman Service and the Senior Managers and Certification Regime as well as the review of Consumer Duty. We look forward to working with government, regulator and industry to deliver this forward-looking programme of reforms.”
