Publication Restoring Trust: Investment in the twenty-first century

Executive Summary

The findings of this inquiry represent a vision of a better investment system, developed by those who work in it.  It is based on interviews and workshops conducted with over 500 people drawn from every aspect of the investment ‘chain’.

The principle conclusion of the inquiry is that while the whole system is relatively robust – and a number of reforms are still working their way through to strengthen it further – there has been a significant and continuing erosion of trust. This is not just in the financial services industry, but also in big companies as stewards of people’s savings and pensions.

To read the full inquiry which include the context of the inquiry and the inquiry team’s vision in changing the investment system by addressing five key area of change, please download the link below.

Our main proposals in the inquiry are that:

• The teaching of basic finance should be made compulsory in the school curriculum.
• The success of projects such as Young Enterprise, in which school pupils get to run their own ‘businesses’, should be built on.
• More complex financial concepts and how to plan for retirement should be made available in higher and adult education.
• Suppliers of financial products should take action to enable individual investors to develop a better understanding of risk.
• The industry should aim to develop a classification matrix describing types of product and the associated risks.
• As a way of building on current regulatory requirements investors should be kept regularly informed of all the underlying costs incurred in managing their assets.
• ‘The statement of principles’ proposed in this inquiry, combined with the industry-wide forum, is the chief means by which the industry becomes proactive and committed to protecting the individual investor.