Fortnightly financial #44 John Godfrey
Richard Freeston-Clough, Communications and Stakeholder Business Partner, speaks to TheCityUK Managing Director of Public Affairs, Policy and Research, John Godfrey about the organisation's role within financial services, the value FSCS brings, and more.
We are the industry-led body that represents UK-based financial and related professional services. We champion and support the success of the UK-based financial and related professional services ecosystem, and thereby our members.
The industry we represent contributes 12% of the UK’s total economic output and employs over 2.4million people across the UK, two-thirds of them outside London.
How do TheCityUK and your members view the value of FSCS to the financial services sector?
The FSCS is an important part of the financial services ecosystem, providing consumer protection and redress when institutions fail and building trust in the industry. As the financial services industry is ever evolving, it’s important that FSCS and industry maintain a close relationship so it can offer both customers of failed firms and industry the support they need.
By 2066, 26% of the UK population are expected to be aged 65 and over, so the Chancellor’s announcement that she intends to merge Local Government Pension Scheme assets and consolidate defined contribution schemes into ‘megafunds’ is a strong signal about assembling significant pools of capital that can support the Government’s growth mission and address the public policy challenge of an ageing society.
However, the pensions industry has a fiduciary duty to deliver retirement income for savers. The mission to invest more in UK productive assets can be compatible with that, and consolidation helps, but we also need to have the right supply of assets in which the pension funds can invest.
It is also important that more people from across the UK have the opportunity and support to benefit from investing their savings in equities and other assets. One way of doing that would be to build on the success of workplace auto-enrolment, and to empower UK savers to confidently engage with and invest their pensions, so consulting to find out how to overcome those barriers is a welcome step.
It is also important to look at how we revitalise the UK capital markets to make both the UK and its assets more attractive to investors. The Government and the regulators both recognise the need to address risk aversion and short termism to optimise retirement outcomes when looking to reform the pension system. Good retirement outcomes and sustainable growth across the UK economy both require a risk balanced and long-term approach to investing. It’s important we don’t confuse best value with lowest cost – the outcome for the saver is what matters.
And what other priority areas are you focusing on in the next few months?The Government’s Industrial Strategy is a big focus at present – Financial and related Professional Services are not just among the eight highlighted growth sectors but are also enablers for the delivery of the growth agenda more broadly. There is also the connected work on international trade where a White Paper is expected. This is increasingly important as the UK is a major services exporter in a world that faces more risk of protectionism and regulatory fragmentation. We also focus on financial regulation, so the implementation of capital markets reforms and the FCA’s next multi-year strategy will be important.
Finally, on a more personal note, a question we ask most of our guests: if £10,000 landed in your lap tomorrow, what would you do with it?I am a new grandparent so I’d invest it long-term to help with the newest family member’s education costs in the 2040s!
Thanks very much for sharing your thoughts with us John.
The content of any discussions shouldn't be taken as an indication of future FSCS policy positions. The views expressed by guests are their own and don't reflect the views of FSCS.