The UK must do more to ease restrictions for retail investors, a director of a leading digital trading platform has said, after renewing calls for regulators, operators and policymakers to incentivise the use of innovative investment products.
Speaking in an interview with City AM, Michael Healy, managing director, UK and Ireland at IG Group, noted that despite intervention to boost retail investing across the country, it is not enough to lure both investors and cash savers to invest in London.
Risk aversion, high levels of regulation and a lack of awareness on how to operate in the stock market has caused domestic investment to remain minimal, leading to the FTSE losing listings to competitors, particularly in the US, in a bid for greater liquidity.
The UK retail investing market is significantly behind the US, with nearly 60 per cent of Americans investing compared to roughly 30 per cent of Britons.
Healy said: “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
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, including a slash to the cash ISA ceiling to £12,000 from April 2027 and hiking dividend tax in a bid to change the tide.
However, Healy argued that while it is a good place to start, it’s not enough to incentivise people away from cash, and that peeling back regulation is also crucial in boosting competitiveness, in particular for digital assets.
He said: “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 its client base, leaving 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…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, allowing 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.”
Chancellor Rachel Reeves unveiled a campaign in July 2025 to encourage savers to invest in stocks and bonds, drawing comparisons to the Thatcher-era “Tell Sid” campaign. Banks, including Barclays and Lloyds, will lead the drive to highlight the benefits of retail investing, alerting customers to investment opportunities and how to move cash from savings accounts.
Treasury officials pointed out that stocks and shares have historically outperformed cash savings accounts, with £2,000 invested in stocks and shares today potentially growing to £9,000 in 20 years, based on current trends.