Another week, another investment industry survey. This time, the Investment Association (IA) is sounding the alarm that “one in five Brits lack investment knowledge.” Their proposed solution? Ramp up investment product sales until 75% of the population is participating in capital markets—regardless of whether individuals have sufficient savings, whether investments are the right tool for them, or the wider economic consequences of this drive.
Let’s unpack the implications behind this data and ambition.
An Agenda in Disguise
The IA’s survey reveals that 17% of UK adults have never heard of a stocks and shares ISA. It interprets this as a call to action: a market failure in need of urgent rectification. But is it really?
The reality is that many individuals don’t invest—not because they’re uneducated or irrational—but because they simply can’t afford to. Nearly 40% of cash ISA holders say no amount of savings would make them feel comfortable investing. That’s not a knowledge gap—that’s a trust gap, a risk aversion rooted in lived experience, and often, the rational prioritisation of liquidity and capital preservation.
Rather than acknowledging this nuance, the industry frames it as a behavioural defect to be “corrected.”
The Wrong Tool for the Job
The IA’s push toward stocks and shares ISAs ignores fundamental questions:
- Do households have enough surplus income to invest?
- Would savings accounts, pensions, or debt reduction better suit their financial goals?
- What about those saving for short-term security, not long-term speculation?
This blanket encouragement of investing, under the guise of improving financial literacy, risks becoming a mis-selling scandal in slow motion.
What They’re Not Telling You
Buried beneath the buzzwords is a more troubling dynamic. The IA fails to mention that:
- The UK market represents less than 4% of global market capitalisation.
- Most of the money invested in funds ultimately flows overseas, away from the local economy.
- The lion’s share of these British investment strategies are now chasing illiquid, long-horizon infrastructure assets—far removed from the needs of everyday savers seeking access, flexibility, and reliability.
Meanwhile, the exodus of cash deposits from the banking sector, if successful, could lead to an unintended consequence: rising costs for borrowers, as banks struggle to meet their liquidity needs. This would be inflationary, regressive, and potentially destabilising.
A System That Serves Itself
Let’s be clear: the investment industry’s pledge to increase market participation from 20% to 75% is not a public service. It’s a business strategy—an aggressive one—designed to scale profits by widening the funnel of retail investors.
But this “democratisation of investing” doesn’t equate to empowerment. If anything, it risks turning the unadvised and vulnerable into fuel for fee extraction, while leaving them exposed to market volatility they don’t fully understand and never consented to engage with meaningfully.
A Better Alternative: Planning Before Product
What’s needed is not more product promotion, but more life planning—starting with goals, values, and real-world circumstances. For many, the best route to financial security isn’t gambling on the market but building up emergency savings, reducing debt, or investing in their human capital.
At the Academy of Life Planning, we champion a holistic approach. Financial empowerment isn’t about pushing products. It’s about helping people understand what enough looks like for them—and designing a plan that aligns money with meaning.
Let’s not mistake marketing for education, or ambition for altruism.
Your Money or Your Life
Unmask the highway robbers – Enjoy wealth in every area of your life!
By Steve Conley. Available on Amazon. Visit www.steve.conley.co.uk to find out more.
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