Investment Association sets out industry priorities for next government

Out-Law News | 06 Nov 2019 | 3:52 pm | 2 min. read

The Investment Association (IA) has called on the next UK government to secure the country's status as a global hub for investment management.

The trade body, whose members manage over £7.7 trillion worth of global assets, has recommended six priority areas of focus for the next government (24-page / 7.1MB PDF). They are promoting the UK's global influence; corporate governance; sustainable finance; employee ownership; pension scheme investment in infrastructure; and workforce skills.

Asset management expert Elizabeth Budd of Pinsent Masons, the law firm behind Out-Law, said: "Regardless of the outcome of the general election, the investment management industry has consistently been seen as a significant part of the UK economy going forward. The IA's manifesto draws together clear messages on the six key areas that the UK must strive to be market leaders in if the UK is to continue at the heart of the global investment management industry".

Budd Elizabeth

Elizabeth Budd

Partner

Regardless of the outcome of the general election, the investment management industry has consistently been seen as a significant part of the UK economy going forward.

"Recent announcements from the FCA, and Treasury secretary John Glen's letter to the EU (2-page / 351KB PDF), show that the UK is keen to engage with the EU to ensure regulatory equivalence, which is a major component part of assisting the UK to maintain its global position in the industry," she said.

The IA is recommending that the next government pursue "close regulatory alignment and supervisory cooperation with the EU", recognising the close connection between the UK and EU markets. Future changes to UK financial regulation should uphold the UK's position as a competitive and attractive place to do business internationally, while ensuring saver and investor protection.

The next government should act quickly to set up the proposed new audit regulator which is expected to replace the Financial Reporting Council (FRC), and should ensure any future reforms to corporate governance and the listing rules preserve the UK's global reputation, according to the IA. The next government should support market-led initiatives aimed at making the UK a global leader on sustainable finance, and should promote the value and importance of employee ownership schemes to employees.

The IA has recommended a package of measures to boost UK workforce skills and enable firms to recruit the best talent both domestically and internationally, including targeted reforms to the apprenticeship levy and using the immigration and visa system to support international worker mobility. It is also seeking better training in areas of relevance to the future of the investment management industry, such as cyber security.

The IA is broadly supportive of plans by the Financial Conduct Authority (FCA) to reform the 'permitted links' rules in order to allow defined contribution (DC) pension schemes to invest in infrastructure, but believes the "complex" proposals should be further streamlined. It is also calling for a review of the pensions charge cap so that investment managers have more flexibility to invest in large projects in exchange for greater long-term returns for savers.

IA chief executive Chris Cummings said: "The UK is a global centre of excellence for investment management and we need to maintain and continue to promote the role we have established as we seek out new frontiers post-Brexit".

"We want to see the investment management industry - one of the jewels in the UK's financial services crown - continue to thrive. The government has a key role to play in securing our sector's success," he said.