The Lord Mayor of the City of London has urged regulators to ease stringent risk warnings that discourage people from investing in shares, arguing that current rules make the stock market seem unnecessarily intimidating.
Alastair King, the 686th Lord Mayor and founder of asset manager Naisbitt King, said regulators and financial firms should also alert savers to the risks of not investing — such as inflation eroding the value of cash savings.
“When it comes to putting out risk warnings to customers, we are terrifying people,” King told the Financial Times. “If you want to buy a car, you don’t get constant warnings asking if you’re sure you want to do this. The way we currently warn people about investing in shares is pretty terrifying.”
Call for Balanced Risk Messaging
King’s remarks come as the Financial Conduct Authority (FCA) prepares to publish an engagement paper on improving consumer access to investments. The watchdog recently proposed reforms allowing firms to provide tailored guidance to investors while maintaining consumer protection.
In a statement, the FCA said it was “undertaking significant work to rebalance risk,” including reforms designed to boost confidence in long-term investments. “Ensuring that people have the right information to take informed risk will always be important,” it added.
King suggested regulators should also promote the concept of a “risk of not investing” to highlight how keeping money solely in cash accounts can lead to long-term losses through inflation.
Encouraging Retail Investment
The Lord Mayor’s intervention aligns with efforts by Chancellor Rachel Reeves, who is considering policies in the upcoming November 26 Budget to stimulate UK share ownership. Proposals include reforms to the Individual Savings Account (ISA) regime and potential stamp duty relief on new share issues.
The Treasury is also weighing whether to halve the cash ISA allowance from £20,000 to £10,000 to redirect funds into stocks and shares. King, however, pushed back on that idea, suggesting a more flexible approach — merging all ISAs into a single tax-free account allowing savers to shift easily between cash and equities.
“Instead of having to withdraw from a cash ISA to put money into a stocks-and-shares ISA, there should be a single account where savers can switch between the two,” he said.
Comparing Global Investment Cultures
King pointed out that UK households invest a far smaller portion of their wealth in equities than other developed nations. According to Aberdeen’s analysis of national accounts, only 8% of UK household wealth is invested directly in shares or mutual funds, compared with 33% in the US and an average of 14% across G7 economies.
He praised Sweden’s approach, where nearly 40% of citizens invest through a tax-efficient vehicle known as the ISK, which offers a SEK150,000 (£11,900) tax exemption. “They have a good retail equity culture in Sweden, and that’s something from which we can learn,” he said.
Regulatory and Cultural Reforms
In his upcoming speech at the Mansion House regulators’ dinner, King will commend recent moves to reform the Financial Ombudsman Service, relax Consumer Duty requirements for wholesale firms, and simplify the Senior Managers and Certification Regime.
However, he will also urge faster progress in other areas, noting that while the FCA has embraced the government’s push to support growth and competitiveness, the Prudential Regulation Authority (PRA) — part of the Bank of England — could do more to align with this goal.
“The mood music could change at the PRA,” he said. “They can maintain financial stability as their priority while also helping unlock economic activity.”
Before concluding his term as Lord Mayor next month, King plans to launch a network of chief risk officers to share feedback with regulators and promote reforms that could make investing more accessible and less intimidating for the public.
By reframing how investment risk is communicated, he hopes to shift Britain toward a stronger culture of retail investing — one that encourages participation rather than fear.
