As the UK government pushes ahead with the Leeds reforms, aimed at opening up private markets to retail investors, Nick Perrett — CEO of wealth management platform Prosper and Chairman of the WealthTech Alliance — offers a timely and critical perspective on the risks of moving too fast without the right protections.
“The Leeds reforms are bold and necessary – but democratising private markets without proper safeguards is like teaching someone to swim by throwing them in the deep end. Most people can’t even define what private markets are, yet we’re about to have banks nudging them out of cash into complex, illiquid investments. I worry we’re setting up PPI scandal 2.0. We absolutely need to get people investing rather than watching inflation erode their cash – but let’s be smarter about it. Rate financial products like we rate restaurant hygiene. Make risk warnings that actually differentiate between Bitcoin and a globally diversified portfolio. And for heaven’s sake, let’s be brave enough to put warnings on cash itself – because the risk of inflation destroying your purchasing power is just as real as market volatility.
Financial services providers can and should help people build wealth without extracting maximum fees from ‘lucrative’ products they don’t understand. These reforms could be transformative if we get the guardrails right. Get them wrong, and we’ll set back UK investment culture by decades.”
