Bonus interview: Why we need a campaign to get people investing

0:00Simon Lambert: Hello, I'm Simon Lambert and welcome to a bonus episode of This Is Money podcast. A short one where I'm going to be speaking to Karen Northey of the Investment Association and the new retail investment campaign designed to turn Britain's savers into a nation of investors. Karen, welcome to the This Is Money podcast. Thank you, Simon. It's really nice to be here. so you've launched the big campaign this week uh to try to get britain's investing it's been quite a busy week for you um tell us a bit at the start about the campaign what's it about and who's it for sure so the campaign uh called invest for the future launched as you say yesterday on thursday this week with the 20 member firms.

0:55So we have 20 firms from across the financial services sector who have come together to, as you say, change a nation of savers into a nation of investors and actually try and address all of those people who think investing just isn't for them, right? So they have a very, this idea of what an investor looks like and it's not them. And so we want to change that because we think investing can be for everyone. So it was announced in the summer of last year by the Chancellor and our Mansion House speech as part of her reforms, the Leeds reforms, that this would be happening. So we've been working away, squirreling away, as you might say, since last summer, bringing together the firms, you know, thinking about how we would go about it and doing the creatives.

1:40And so, yeah, now we are launching and we have launched a what it will be a multi-year campaign, but it will be an advertising campaign, completely non-commercial. This is about education and behavioral change and getting people to open to the idea of investing. So we've launched that now and we will continue that for a number of years, trying to get make investing more approachable. So get the message out and help people turn their minds to it and talk about it and be more comfortable with the idea of being investors.

2:17Simon Lambert: And it's been referred to, I mean, by us included on This Is Money as a government campaign, government backed campaign. But it's not it's not actually a government campaign, is it? No. What's the difference there? How does this thing fit together? Sure. It was announced by the government. And I think having their support has been really, really important because, you know, it is it is a national campaign. And I think that's helped. I think what's also helped is that we've had both the Money and Pension Service, which is a government agency and the Financial Conduct Authority, which is our regulator around the table with us from the very beginning and very, very supportive as well in order to make this happen.

2:59And that's, I think, really, really important for the firms that are around the table. But it's important for the campaign itself, making sure we're doing what we should do. We're not straying into any areas we shouldn't. But also, I think it gives a really strong signal, which is a change, I think, from history, from the regulators, where I think there was this real perception about investment was too risky or, you know, it's something that people had to be protected from. And actually now things have changed. And, you know, we have the government and we have the regulators backing this campaign and supporting this campaign and providing their expertise and their support.

3:39So but it is not a government funded campaign. It is not a government directed campaign. It is a group, as I said, of at the moment, 20 firms and obviously always happy to have more join us as it builds. But it is a group of 20 firms who are funding it and launching, you know, joining together to launch the campaign.

4:05Simon Lambert: And it's not a tell Sid moment either, is it? Which for our listeners who do not understand the slightly obscure but regular British cultural reference point, it were the adverts to try to encourage people to buy British gas shares and the privatisations of the 1980s. 1980s and those 1980s privatizations although successful at getting people to buy individual shares were directed at just that weren't they what is the sort of the next step that you want people to take if if this campaign registers with them you know what do you want them to do next yeah no um it's funny because tell sid comes up a lot and i didn't grow up in the uk um although was probably old enough to know what it was.

4:50But it is very different. So first of all, this is not about buying a particular share. This is not going out and buying any one thing. And it's not about an instant action, right? So one of the key messages very much is, investing should be a long-term thing. And this is not a one-off buy the share. This is about getting started. It's about becoming more confident, more informed. And, you know, this is really, I think that's a big difference. As I said, it's completely non-commercial. So the campaign will not tell anyone what to buy, you know, how to buy it. So this isn't, you know, there are many ways to get into investing.

5:34You can do it yourself. You can go to a platform, you can buy a fund, you can buy a share, you can buy an investment trust, you can talk to a financial advisor, you can talk to, you know, you can rely on the new targeted support. So there's lots of ways to get into it. And this is really about a mindset shift. This is about a behavioral change. But the key message, I think, which is very different is this is about the long term. This is about your long term future. If you want to be able to achieve your long term goals, whether that's retirement or, you know, paying for your kids university or, you know, whatever that might be, investing is a good thing to think about.

6:10and and why does it make sense why does investing make sense to people why why should they do it what what difference will it make to them yeah and look there are so many different studies and statistics and and i can cite number it's like the difference between if you hold your money in cash for a long period of time versus if you invest and that holds true across you know turbulent markets and upswings and downturns, et cetera. If you hold your money over time, you will be better off and you have been better off in every scenario that has happened so far. If you look back and if it's a diversified, and we're not talking, like you can buy a single share and if it goes down, it goes down, but we're talking about a sort of broad diversified investment.

7:00So inflation will hit your cash, you know, your buying power. If you've got cash, you know, We all know when you go down to the shops or go down to the pub, your money doesn't go as far. So, you know, you need to be able to grow your money in the long term. And so I think that's what it's really about is actually having your money work harder for you in the long term.

7:24Simon Lambert: I think that's a good analogy. I'm going to start talking to people about the reason why they should invest to beat inflation is if they just hold their money in cash and they go to the pub in a year's time, they won't be able to get a full pint but if they invest their money they'll be able to get a full pint and a bag of crisps absolutely no it's a good analogy right it's and it's it's you know we can talk about things like inflation and you know cpi and rpi and all these things that you know uh some people understand um but you don't have to you just have to know that pints are more expensive than they used to be um so what stops people investing because this is a key element of of the campaign and actually something that the the bits of it i've seen seem to try to talk to people about it's the kind of the belief that it's not for people like them what is it that stops them doing it yeah i mean i think there's there's a few different um things i think one is you know straight out fear they think you know that we we this sits within a wider package of changes that are happening so but one of those is risk warning so you see that that sort of prolific capital at risk and you somehow think you're going to lose all your money you know this is not this isn't an all or nothing you know there's but there's a fear so there's an element of talking through what it means and providing more um more information and giving people um signposts to how they can find out more.

8:52So definitely fear of loss is one of the big challenges. Being overwhelmed by, there's just a lot of information, a lot of jargon, a lot of different options. So again, part of the campaign is we do have a website, search Take the Next Step Invest, and you'll be able to go to that website and it'll help signpost and provide some, you know um some questions information but also some basic information so that that helps as well again it's not going to tell you you need to buy product x from supplier y but it will it will help um guide you where um where to go and how to get started because i think that's a big part of it but also one of the things that i find really interesting is this sort of it's not socially normal to talk about more money and investing and all of these sorts of things um and so part of the campaign and one of the things i'm really passionate about is how do you get people talking about it and if it's talking about a squirrel if it's talking about an advert or whatever it is how do you have more regular money conversations because you know we've done some research and and we've got 37 % of savers so non-investors say they're more likely to be investors uh to become investors if they talk to someone they know so friends family etc except for 69 % of people say they don't talk about money and investing and and people want to know about investing and they want to have the information so we've got 44 % we've said you know in the recent research we've done have said that are not investors people non-investors want to know more so you've got people who want to know more you've got you know people who if they knew more from people they know might become investors but then you've got 69 percent of the population not talking about it so I think one of the big challenges is nobody talks about it and we've got to get past that we've got to have those conversations and I think that's incumbent on everyone I mean yes the firms can go so far as individuals we had an event yesterday we talked a lot about what can we do as individuals well talk about it you know i know you you do this out of david so you do this already but there are a lot of people who could just have basic conversations i remember being at something

11:13Simon Lambert: many years ago and it was talking about uh workplace pension schemes and people signing up to workplace pensions and it might have even been before auto enrollment um but they said that if you had an advocate for the pension scheme within like teams or in the company if you had somebody there who said you should sign up to the pension or you should sign up and make the most of the pension because actually that's something people need to watch out for with auto enrollment is auto enrollment might not be as good as their works pension and they might not be in the good one they might be missing out but if you had an advocate then it made a massive difference to the take up of that workplace pension scheme and i do think i agree with you obviously it's my job but to to go out and tell people to make the most of their money but i do agree that lots of our lots of our listeners to this podcast will invest right but they should be talking to their friends and family and saying hey look you know there's this investment campaign you should do you invest you should consider investing because you know you get you get a bit richer you can feel a bit better off we can go to the pub more often we can get some crisps with our pint you know um and i do think that yeah we should we should try to become advocates for it and not be embarrassed about that um because it does it does make a difference and i think you know really basic things like you do not need to have a whole lot of money in order to start investing yes you know you need your cash savings and you need to be able to meet your obligations etc but you know there's a real misunderstanding about how much money you have to have to just get started.

12:52Simon Lambert: And do you think there's an element where we talk about it as if they're sort of, you know, individually separate things, polar opposites, when actually it's a sliding scale and you could still save most of your money and just put a little bit of it into investments? You know, give it a go, you know, put£10 in, you know, whatever,£50, whatever you've got um you start small you know you know uh little and often is always the you know the catchphrase you're better off putting in a little bit on a regular uh you know it doesn't have to be a great big lump sum of money um that goes in uh all at once because that is quite scary i'd be scared if i'd never invested before and had to put a whole lot of money in but um yeah i think that's I think that's definitely it and also you know I mean pensions are always fascinating right because if you ask people if they're an investor they'll probably tell you no but actually quite a lot of people are through workplace pensions and you know maybe just knowing that and understanding your pension gives you it's another way to invest you can put more in your pension right but equally you know if you if you think about it and think well if I'm already an investor maybe it's not so scary that first step you know yeah why is it easy for me there and how can I replicate that in in the rest of my life and there are plenty of platforms and you know places to invest out there that will make it super super easy for people um so finally um before i let you go at the end of your incredibly busy week what what would success look like for the campaign in the in the short term the medium term and the and the long term yeah so what i will say is this is a long-term plan you don't this is this is a culture and a behavior change that has been built up um over many many years and we're not going to change it overnight and we're very much aware of it so one of the things that we are watching very closely is exactly that that perception or that fear so you know how many you know those people how many people think investing is not for me so So I think as a first, really, really important first step is we want to see that the shift in that dial.

15:08Right. So this isn't, you know, everyone go out and invest tomorrow because that's how we're going to judge success. This is about changing culture and behavior over time. And I think that's the most important metrics in the early days. Obviously, longer term, if we change behavior, we expect to see a change in investing. So, you know, you'd expect to see those numbers that even the FCA compiles about people sitting in, you know,£10 ,000 more cash. You know, start to see some of that come down, start to see more people taking advantage of the benefits that investing can bring. But it's starting first with attitude and behaviour, I think.

15:47Simon Lambert: Karen, thank you very much for joining us. Thank you for having me.