Digital Trading Platform Director Calls for Regulatory Easing to Boost UK Retail Investment
Michael Healy, managing director for UK and Ireland at IG Group, has urged regulators, operators, and policymakers to ease restrictions and encourage innovation to boost retail investment in the UK. Speaking in an interview with City AM, Healy noted that despite government efforts, current measures are insufficient to attract both investors and cash savers to invest in London.
UK Retail Investing Lags Behind US and Faces Challenges
The UK retail investing market is significantly behind the United States, with nearly 60 per cent of Americans investing compared to roughly 30 per cent of Britons. Healy highlighted that risk aversion, high levels of regulation, and a lack of awareness on how to operate in the stock market have caused domestic investment to remain minimal. This has led the FTSE to lose listings to competitors, particularly the US, in a bid for greater liquidity.
Healy stated: “It’s been really encouraging to see the government and regulators take a positive position around trying to build a stronger retail investing culture in the UK. But the challenge then is what do you do about it? We’ve got to push people a little bit and that sometimes means taking unpopular positions that require customers or operators to change how they do things.”
Innovative Product Offerings and Regulatory Hurdles
The government has doubled down on its intent to boost financial education in schools, coupled with a series of tax changes in the Autumn Budget. These include a slash to the cash ISA ceiling to £12,000 from April 2027 and hiking dividend tax. However, Healy argued that while this is a good start, it’s not enough to incentivise people away from cash. He emphasised that peeling back regulation is crucial in boosting competitiveness, particularly for digital assets.
Healy explained: “In order for us to be at the edge of that innovation, we have to ensure the right incentives are there for operators. In order for us to have the right incentive for operators, we have to have a sensibly permissible structure to allow people to have access to products. When you benchmark the UK versus international geographies, we have by far the most restrictive regime that I can think of in a modern, progressive, well developed, large economy; we make it really hard for people to access even exchange traded products.”
Unlike other European economies and the US, the selling of crypto derivatives to retail consumers is banned in the UK, despite operators being willing to offer the asset to their client base. This has led some to turn to unregulated companies. Healy continued: “We’re not delivering a worse consumer outcome, because consumers are trading with a business with essentially no regulatory controls, and responsible businesses are sitting on the sideline. We can’t invest in professional futures because we’ve got no market opportunity to do so.”
While the Financial Conduct Authority is not dropping the regulation surrounding the sales of crypto derivatives, it is loosening restrictions on crypto exchange traded notes, lifting the restrictions last October. This allows investors to make their own choice on the high-risk investment and push growth. The product will also be available in Innovative Finance ISAs from April 2026. Healy hailed the move, stating the regulator was moving in “the right direction” but encouraged them to “do more, go faster.”
Operator Fees and Cash ISA Cuts
Healy also noted that “operators have a huge part to play” in pushing investment alongside the government and regulators. Investment platforms have come under greater scrutiny in recent weeks, following Hargreaves Lansdown’s decision to cut fees, leading investors to check how much they are paying and debate switching providers.
According to the latest research from IG, 47 per cent of investors have never calculated their total fees, but despite this, nearly half hesitate investing elsewhere due to the ‘life admin’ involved. The digital investment platform was also a staunch supporter of the cash ISA cut and found itself butting heads with building societies in the run-up to the Autumn Budget, who argued that they used the product to fund mortgages.
IG refuted the claim, viewing it as “largely overstated,” noting it was glad the Chancellor slashed the ceiling to £12,000, but has continued to urge the Treasury to go further to eventually phase the product out. Healy hailed it a “pernicious product that’s completely incompatible with wealth creation” and argued that it was never created to “act as a subsidy” for the industry.
He said: “There’s no other market we can think of where a tax-incentivised cash savings account competes for capital with a stocks and shares tax-free savings account.”
