The Blog

A New Dialogue is Needed on Investment to Benefit Retail Investors 

Following the recent Labour government victory, TEA is calling on the new administration to support retail investors, including driving forward the UK ISA consultation.  

As the hub for inclusive investor engagement and financial literacy, TEA believes that a comprehensive overhaul of how retail investors and companies interact is essential. To foster investment in companies, a new dialogue on investor relations is needed. 

TEA’s detailed analysis of the behaviours, preferences, and challenges faced by UK retail investors underscores the importance of understanding these differences to connect with future generations. For example, Gen Z investors exhibit a distinct perspective on corporate governance and AGMs, with fewer than one in five content to leave decisions solely to the board. To build trust with everyday investors, TEA is urging all companies listed on the London Stock Exchange and Aquis to commit to inclusive investor engagement by December 2025. 

Joseph Vambe TEA’s Gen Z Education Ambassador, and Southwark Labour Councillor states, “Our vision at TEA is to foster a fairer and more financially literate society. This starts with the inclusion of individual investors in corporate engagement, which will lead to better mutual understanding and intergenerational collaboration. With millennials and Gen Z set to dominate the future investor landscape, ISAs must offer digital access, transparency, and ethical practices to appeal to these demographics. Additionally, addressing socio-economic barriers in financial education is vital to broadening investment participation across all backgrounds.” 

TEA advocates for the government to improve the retail investor process through five key areas: 

1. Enhance Digital Engagement: Companies should prioritise digital platforms for information dissemination and AGMs, catering to the preference for online engagement. Clear, jargon-free language is essential for accessibility. Providing resources that demystify investment processes and explaining shareholder rights and benefits straightforwardly can increase understanding and engagement. 

2. Increase Transparency and Openness: As our research shows, the next generation of investors demands greater openness from companies. Regular, straightforward updates can build trust and loyalty. Transparency regarding financials, challenges, and ESG practices can align investor values with company operations. 

3. Facilitate Greater Involvement for Investors: Companies should explore ways to make AGM participation more appealing and feasible for young investors. Ensuring investors know when and how to participate, scheduling meetings outside typical working hours, and offering virtual options can enhance involvement. Valuing young investors’ contributions and demonstrating how their input matters can further increase engagement. 

4. Provide Transparency and Tools for Investor Upskilling: Educational resources about AGMs’ importance and individual contributions can empower retail investors. Financial education targeted at young adults is crucial to overcoming investment barriers. Companies can collaborate with educational institutions or use their platforms to offer investment education on basic financial concepts, strategies, and long-term benefits. Simplifying explanations of shareholder rights and the AGM process can facilitate informed participation. 

5. Promote Ethical and Responsible Investing: With growing interest in socially responsible and ethical investments, companies should highlight their sustainability commitments. Transparency about these efforts can attract Gen Z investors who prioritize aligning investments with their values. 

TEA believes that proactive and inclusive investor engagement will lead to better mutual understanding, helping future-proof companies and mitigate risks. 

As the UK navigates political change, it is crucial to maintain a stable economic footing. While politicians highlight recent economic improvements, the focus must shift to rebuilding and sustainable growth. Investors should diversify across global markets to mitigate volatility during political transitions. By starting investment habits young and staying diversified, investors can navigate uncertain times with greater confidence. 

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