Simon Wood (Addleshaw Goddard)

If you see Sid, tell him, I'm not Sid, I'm Simon Wood, and I'm delighted to revisit the 80s and welcome Barclays Director of Group Policy Development, Rhiannon Price to Mergerspresso. Rhiannon and her Barclays team have published a report on how to engage the UK retail public to invest in the equity markets, which we'll discuss in the time that it takes to make your coffee. Rhiannon, for our younger listeners, who is Sid and why does he feature in your report?

Rhiannon Price (Barclays)

Well, I actually have a confession to make that I'm also too young to have participated in the Tell Sid campaign in 1986 and definitely too young to remember the buy your own share of American business campaign that ran in the US in the 1950s and 60s. But in a nutshell, the background to the Tell Sid campaign was a decision by the government of the day that they wanted to create a shareholder democracy. And so there are a number of different elements to this; Mass privatisations of previously state-owned entities, British Gas being the most well-known example, the big bang of deregulation, but most importantly, a big public campaign that looked to engage individuals with owning shares in those previously state-owned and now public companies.

So the Tell Sid hook came from the marketing campaign around privatising British Gas, meaning Tell Sid that the share offer for British Gas is open and that it's out there for everyone to participate in. And the adverts were absolutely everywhere. So there were billboards, TV, radio basically everything that kind of equates to the TikTok of its day. It really entered the Zeitgeist, everyone was talking about Tell Sid. So, my report looks at whether this campaign was effective in creating a long-term culture of shareholdership and also looks at two other similar attempts in other jurisdictions to engage normal people in holding shares and asks what made them more or less effective than the UK campaign in 1986.

Simon Wood (Addleshaw Goddard)

I am old enough to remember and it was everywhere. But in your, your/ Barclays view, why is that widespread retail show ownership so desirable?

Rhiannon Price (Barclays)

So at a time when we're all really aware that the country needs to focus in on growth and growing the economy and generally getting the public engaged and aware of that connection between their savings and then how a company finances their growth is really important. So we've just put out research that shows that there's 610 billion in cash savings that could be invested by normal people. And we want to make clear that the idea that the stock market is a distant thing for people in Canary Wharf to care about, that's what we want to counter. We want people to associate the success of listed companies with their own success, their wealth growing. And associating it with jobs being created in the local community for their friends and families. That's what it is to be a share owner, to play an active part in the economic growth that's in all of our interests.

Simon Wood (Addleshaw Goddard)

And I was struck by the research showing that information and support was more valued by people who haven't yet invested rather than the cash offered in a financial incentive. What do you make of that?

Rhiannon Price (Barclays)

Absolutely, so we've been doing research into the barriers that stop people investing and precisely which policy tools will overcome them. Some of that was qualitative research with big focus groups, that kind of thing. And it was really interesting seeing the difference between potential investors and those already investing. And it was something that honestly came out of this research that I didn't necessarily expect. And so we did additional polling to back it up and it basically showed, so we put out six different options to a wide group of people on what it is that would motivate them to invest. So three of them involve financial incentives and three involve support in investing. And it backed up the hypothesis that we got very different responses from existing investors to potential investors. So the top choice for existing investors, 51%, was an additional tax-free ISA type allowance, followed by 41 % for a bonus of some shares. Whereas with potential investors, the opposite was true. The top two choices were support on choosing investments and support on understanding risk. Now that's a very different policy dilemma to solve than finding many at a time when the public purse is constrained to finance a financial incentive. So we combined this with the research into the other investing campaigns that had actually had investor education at the heart rather than a big financial share offer. And we reached the conclusion it was actually the campaign with education and kind of what is the point behind investing that could actually support savers starting investing rather than needing kind of a British gas type share offer to kind of make that campaign work.

Simon Wood (Addleshaw Goddard)

So now the report's published, what happens now and what do think we can expect from the government in the next say 12 to 24 months?

Rhiannon Price (Barclays)

So we're really pleased that the Chancellor announced in her Mansion House speech in July, her support for an industry-led mass retail investing campaign. And the FCA has expressed their support for it as well, so they're going to be involved. So Sasha Wiggins from the private bank wealth management area from Barclays is going to chair an industry-led steering group that's going to design a mass retail investing campaign. So after much work in coming months. Ably helped by the Investment Association, who's going to be providing a secretariat to the group. By April next year, in a nice, ambitious way, we should all be seeing the fruit of our labour. So my hope is that much as we all still have that reflection of Tell Sid, even if we don't actually, weren't part of the share campaign, my hope is that there's going to be a similar expression that's going to drop into common parlance that we'll all be thinking about as the messages of that campaign continue over the next, not just next year, but over a multi-year period, we'll be hearing different things, that will hopefully be moving that dial in terms of getting people to start investing. 

Simon Wood (Addleshaw Goddard)

Rhiannon, thank you so much. It is a great report and brings some much needed positivity to the UK public markets debate. A link to the report is in the comments below and huge thanks to you and Barclays for taking the time out to speak to Mergerspresso.