Chancellor’s Mansion House speech to target growth reforms in financial services

• The chancellor will announce a series of reforms to financial services in her Mansion House speech this evening, as part of the government's pro-growth agenda
• She will argue that since 2008 financial services have been constricted by risk averse decision making which ultimately harms the growth potential of investors' money
• Sensible reforms through the review of the advice guidance boundary are crucial to creating a culture of investing in the UK
• Measures aimed at tackling the £8.3 billion problem of fraud by holding social media platforms as well as influencers to account are also a positive step to help boost consumer trust
• However, when it comes to attempts to drive growth using people's pension money, it is vital savers are not left behind and forced to pay the price in the long term

Tom Selby, AJ Bell director of public policy, comments:

"Rachel Reeves has placed the UK's financial services sector front-and-centre of the government's drive to power long-term growth. From creating pension 'megafunds' to a shake-up of the approach taken by regulators and reforms aimed at improving the help available to investors, the chancellor clearly wants to show she means business about turbo-charging the economy. It is certainly fair to say there has historically been a focus on the risks of investing for retail customers in UK regulation, often resulting in the potential long-term benefits being drowned out by risk warnings. Moving to a more balanced disclosure approach and making sensible reforms to the advice guidance boundary are both crucial to creating an investing culture in the UK - something which should ultimately help investors get better outcomes and boost UK plc too.

"Social media platforms are awash with questionable financial offers from bad actors and influencers duped into plugging sub-standard or fraudulent financial products. The FCA and ASA have already issued warnings against finfluencers pushing get rich quick schemes on social media, and a number of celebrity influencers have been interviewed under an FCA crackdown on finfluencers suspected of plugging financial products illegally. The chancellor has signalled that it isn't just the individuals on social media platforms who need to take responsibility for this, however, with the social media companies themselves also being asked to demonstrate they're making progress to tackle scams.

"When it comes to investing more of people's pension pots in 'productive' assets in the UK, it is vital the long-term needs of savers are not sidelined. Ultimately, the main role of investing for retirement is to deliver good outcomes in retirement. In the government's increasingly desperate search for investment and growth, it is crucial savers and retirees are not forced to pay the price through sub-standard investment returns."