ShareSoc calls for improved Financial Education:
- ShareSoc Patron Lord Lee has asked a Parliamentary Question about the obstacles that prevent the creation and broadcasting of more educational TV programmes on the subject of investing.
- Investing requires a base level of financial knowledge, but the subject is not covered by the school curriculum and is not easily learnt subsequently.
- Most of the available educational information about investing is produced by parties that are not independent. Too many websites encourage short term trading and fail to explain the impact of risk and high costs.
- The UK only has 5 million people who invest in shares out of 67 million inhabitants. Far too many people are missing out on the benefits of investing in shares.
- UK share price valuations are lower than in other countries. This may be due in part to the limited participation of retail investors. Low valuations are leading to many companies being taken over, often by foreign companies and/or private equity.
Lord Lee, Patron of ShareSoc, the UK Individual Shareholders Society, said “My contention is that there is a total failure by television to focus any programmes on Stock Market investment etc., primarily I believe because of the inhibiting restrictions emanating from FCA/Ofcom”.
Cliff Weight, Director of ShareSoc commented “The Government is working hard to promote the attractiveness of the UK stock markets for issuers, but needs to work harder on the demand side of the equation. We need more and better-informed investors. Without improved financial education, opportunities for the public to support great British companies will not be optimised.”
He added “Too much money is invested in cash attracting miserable interest rates. History teaches us that the extra risk of investing in shares is more than compensated by long-term returns.”
Below is a copy of Lord Lee’s Parliamentary Question and Press Statement.
For further information please contact
Cliff Weight, Director, ShareSoc
John Lee, Patron, ShareSoc
Press Statement
From Lord John Lee of Trafford DL FCA
On Wednesday 18 August I tabled the following Written Question to the Department of Digital, Culture, Media and Sport. It is due to be answered with 14 days (2 September 2021).
“To ask Her Majesty’s Government whether they will meet (1) representatives of the major television channels, (2) the Financial Conduct Authority, and (3) Ofcom, to encourage the development of programmes that promote investment in shares of companies quoted in the UK.”
Background:
“My contention is that there is a total failure by television to focus any programmes on Stock Market investment etc., primarily I believe because of the inhibiting restrictions emanating from FCA/Ofcom. I would make the following points:
- The many excellent UK PLCs that we should be proud of and give coverage too are consequently undersold.
- Television coverage of investment opportunities – delivered into homes – could significantly increase the number of private investors – offering more attractive returns than the zero interest of bank deposits, but with all the obvious caveats.
- Younger people would hopefully realise that there are other forms of investment than ‘day trading’ and ‘crypto-currency’ temptations.
How can it make sense to allow Betting/Gaming advertisements, yet effectively block Stock Market coverage? Of course, there have to be controls, presenters cannot personally benefit etc., but surely the current situation is thoroughly unsatisfactory. No wonder UK equities are considered under-valued and prey to foreign/private equity bids when their merits are concealed from so many!”
Lord Lee of Trafford DL FCA
House of Lords, London, SW1A 0PW
Information About ShareSoc
ShareSoc represent the views of individual investors. In addition to our own members, 6 million people own shares or have investment accounts with platforms in the UK. The Office for National Statistics estimates that at the end of 2018 UK-resident individuals held 13.5% of the UK stock market, up by 1.2% from 2016 and moving away from the historical lows of 10.2% in 2008. In 2020, the Financial Times estimated that 15% of the UK stock market is held by individual shareholders. In addition to this there are many more who have money invested in shares via funds, pensions and savings products such as employee share ownership schemes. See https://www.sharesoc.org/investor-academy/advanced-topics/uk-stock-market-statistics/
ShareSoc, the UK Individual Shareholders Society
ShareSoc is the UK’s largest retail shareholder organisation acting in all areas of the UK stock market more than 7,000 members. It is a not for profit company. ShareSoc is dedicated to the support of individual investors (private shareholders as opposed to institutional investors). We aim to make and keep investors better informed to improve their investment skills and protect the value of their investments. We don’t shirk from tackling companies, the Government or other institutions if we think individual shareholders are not being treated fairly. See www.sharesoc.org.
I certainly support the sentiments of this initiative. But I have forebodings, given the left leaning nature of the TV media, whether more exposure of the stock market by them might be used to attack the capitalist concept.
Worth noting that there is one regular and popular TV programme about investing & business: Dragon’s Den. Albeit not public equity investing but the “Dragons'” thought processes and dissection of business cases are quite educational and apply to investment in public equities as well as the start-ups that are the main focus of the programme.
Strongly support the initiative to remove regulatory deterrents to producing content that informs and educates about investment. A difficulty I can see with the subject is that sensible investment requires patience and results are measured in years not days. Not easy to devise an engaging format that doesn’t offer instant gratification!
DD could be made more educational if half of each programme was devoted to following up on past investments, so viewers could see what worked and what didn’t – where the dragons got it right, where they didn’t and how they helped (or hindered!) the entrepreneurs.
I do like Mark’s suggestion of allocating part of the DD programme to feedback on the success or otherwise of their investments. However, this is speculative investing in startups and high risk and I suspect not what Lord John Lee had in mind.
There is such a large scope for entertaining and educational programming when dealing with this subject matter, starting with the history of stock exchanges, regulation, risk & reward, large institution investors and who they serve, types of financial products, speculators, market makers etc….. All this before one even talks about the dynamics and performance measurements of individual companies.
What an enlightening experience this could be when compared with reality TV, jocular news quizzes, incessant multi-channel flooding of Agatha Christie and Cookery programmes.