Reeves has just allowed the City to foist its undesirables upon the rookie investor
Rather than a thoughtful series of proposals to steadily draw us from our shells, build confidence in the face of a daunting system and allow us all to take greater control of our financial futures, in her Mansion House speech the Chancellor has offered us up as sacrificial lambs.
Sensing Downing Street's desperation in its attempts to divine growth, the City has taken the opportunity to foist its undesirables upon the retail investor, hoping a combination of greed and ignorance is potent enough to leave us all holding the bag.
When Sir Keir Starmer declared the UK would be 'open for business' under his Labour government, he failed to mention that would come at the expense of everyone else.
I agree with core principles of the Government's strategy. A competitive regulatory environment is important. We should harness the UK's global leadership in financial services – building a retail investment culture is a good idea.
But it appears that once the Treasury had its subheadings, it allowed the City to fill in the blanks and forgot to mark its homework. More than ever, the devil is in the detail.
Rather than making it easier for us all to invest in the highest quality, most liquid stocks, the reforms will instead lower the requirements for flogging us hard-to-sell, difficult-to-value assets.
An easy reform would have been Isa simplification, allowing us all to invest in stocks and save cash within the same product. Instead, they have brought the long-term asset fund (LTAF) into the stocks and shares Isa, and promised banks they can send us notifications to buy shares sometimes.
The LTAF is a product largely invented to allow pension funds to invest in private markets and infrastructure assets, the sorts of investments that require you to stay put for 20 years or more. Not only is this unsuitable for the majority of us, we as retail investors already have a way to access these investments through our deeply envied investment trust industry.
If we're struggling to convince people to buy stock in our FTSE 100 companies – because they believe they're too complex or too risky – I doubt these savers will have the wherewithal to conduct due diligence on an asset that most fund managers aren't legally allowed to invest in.
The Financial Conduct Authority has simultaneously produced a set of reforms that will make it easier for us to buy individual corporate bonds, a product no first-time investor should be considering to build their portfolio with.
And Reeves sang the praises of the private intermittent securities and capital exchange system (Pisces), which would allow shareholders in private businesses to occasionally flog their shares to the rest of us. These are even riskier and more difficult to sell than anything you could find on Aim – in fact, currently, they're impossible to sell.
While the safety railings are being dismantled, the Government is also watering down the protections we're afforded as consumers. The Financial Ombudsman Service will pay out less than it used to, and be neutered of its powers at the behest of businesses – a fact the Government acknowledges in its statement.
Risk warnings will be tempered to be less off-putting, and less than two years after the Consumer Duty came into force – legally requiring businesses to consider the customer more than before – the regime faces reform.
The simplest solution to breaking down barriers and encouraging the non-investor to dip their toe is education, yet even on this point, the Government isn't on our side.
Rather than announcing a new programme of financial education in schools and building a generation of investors, the reforms focus on shifting the curriculum to 'align approaches on shared skills priorities in the financial services sector'.
Once again, the Government has proven it is deeply vulnerable to lobbying. The building societies complained loudly enough to ensure the cash Isa reforms were shelved, and the investment industry has lobbied hard enough to sell its private markets to us.
In her Mansion House address, Reeves said: 'For too long, we have presented investment in too negative a light, quick to warn people of the risks, without giving proper weight to the benefits.'
We are on the edge of forgetting those risk warnings are there for a reason.
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