Investment Association chief executive Chris Cummings has said the UK “needs the ingredients of a new investment agenda”.
Speaking at the at the trade association’s annual conference today (5 June), Cummings explained the UK has “moved towards a culture of safety first” and that it must re-establish the process of taking “appropriate risk to create long-term growth”.
The IA chief added that the real risk is doing nothing, as that is worse than “not getting it completely right and not quite receiving the right advice”.
Financial Conduct Authority chief executive Nikhil Rathi, who also spoke at the conference, agreed that investors need an “appropriate risk appetite to increase growth in the economy”.
However, he did add that “we need to accept a number of things have gone wrong and part of the regulator’s role is to explain that to people”.
Rathi added that from the watchdog’s perspective “the FCA wants to make progress and we can only do that by talking to investors and allowing them to share their opinions with us”.
Cummings also said that the UK needs to put investment “front and centre” in the pension scheme market and that the auto-enrolment rate is too low for people to enjoy a decent standard of living.
At the end of May, research from the Phoenix Group stated 71% of UK adults believe the government should set out a plan to increase the minimum auto-enrolment pension contribution rate.
The long-term savings and retirement business research also found that the current statutory minimum contribution level of 8% – from the employee and employer – is unlikely to provide enough funds for most people to meet their retirement expectations.
Meanwhile, over a quarter (27%) of non-retirees think the minimum auto-enrolment contribution rate is too low.
Cummings also warned about the UK’s financial literacy.
St. James’s Place CEO Mark FitzPatrick, who was speaking at the conference, added the amount of financial education in the UK is “shamefully low”.
The financial services industry has said it is not its responsibility and the Department of Education have said it does not have the funds to deal with this issue, FitzPatrick added.
Cummings believes bolstering financial education will “build a financially resilient nation”.
What far too many “investors” really want is equity investments that behave from the word go like turbo-charged cash savings, which is why so many bail out when things look bad for more than a few months.
They almost need it rammed down their throats that this just isn’t how things work in the real world.
ZZZZZZzzzzzzzz……
Same old… probably didn’t even disturb the liquer rounds at luncheon!