If the government told you doing something with your money was a good idea, would you do it or run a mile?
It’s tempting to think most of us would do the latter, considering the woeful job successive governments have done on the UK economy over the past two decades.
But people may be more receptive than you might think to a government-backed campaign soon to launch encouraging us to invest.
The so-called Retail Investment Campaign will involve the government and financial services industry getting together to try to nudge savers to invest, existing investors to invest smarter, and those who need help to take advantage of new financial advice-lite ‘targeted support’.
And while you may fear this will be another dull but worthy camp exercise that falls on deaf ears, a new report suggests investors are interested.
A survey by Edelman Smithfield of 1,000 British retail investors – as the industry insists on calling ordinary people who invest – found that 63 per cent said the government investing campaign will make them reconsider how they save or invest.
And younger savers are even more receptive, with 85 per cent of 18 to 34-year-olds saying it could change their behaviour, compared to 43 per cent of over-55s.
Rachel Reeves wants you to invest your money instead of leaving it in cash savings
So, are we about to finally get a rerun of Tell Sid era of ordinary people investing? This was the tagline to get Britons to invest in British Gas shares in the 1986 campaign that is held up as the example of how a nation’s stock market passion can be ignited.
I suspect the success of the Tell Sid campaign has been somewhat legendised over the years. But when I broke off from writing this to discuss it with my colleague Jeff Prestridge, he pointed out that it did genuinely capture something of a moment.
Ordinary Britons really did flock to buy shares in the privatisation fever at the time – and Tell Sid both epitomised what was happening and encouraged more to get involved.
Although I was at primary school at the time, I do remember a bit of that, and I certainly remember the ragbag of shareholdings that my family ended up with after.
Like many families across the country, some of us still have those stocks.
But Jeff also made another good point, the foundations underpinning Tell Sid weren’t the sensible investing ones that he and I shout about on regular occasion.
It wasn’t about thinking long-term, diversifying and regular investing, it was about buying shares in the hope of making a quick buck.
Privatisation may have created a nation of shareholders, but they were massively overexposed to just one sector, industrial and utility companies. A portfolio made up of British Gas, BT, BAA, electricity and water firms is not a balanced one, even if you sprinkle some BP, BA and Rolls-Royce on top.
In fact, if the government got across the same message as Tell Sid, it would be doing the wrong thing.
Making quick profits on single stocks isn’t what’s being promoted. Instead, Rachel Reeves wants to get mass affluent Britons to stop sitting on huge sums of cash in low-rate savings accounts and to start investing it in the stock market instead. Reeves and her Tory counterparts before her argue this will boost our collective wealth, support the UK stock market and British business.
The idea is the campaign will kickstart savers turning into investors and seeing the benefit of long-term investing.
This month will also see the introduction of what’s known as ‘targeted support’. This is a new FCA-regulated concept that aims to bridge the gap between guidance and full financial advice. It will allow firms to provide suggestions to people with similar needs. Think of it a bit like the people like you also bought, read, watched recommendations we are so used to nowadays.
From a position where I talk to so many people who want a bit of help but cannot afford to spend thousands on financial advice, I’m very interested to see how this plays out.
My big question is will people trust it. The Edelman Smithfield research suggests they will, with 72 per cent of retail investors saying they would trust targeted support from their bank or investment provider. That’s a good start but it will be up to the financial industry not to mess it up.