1 00:00:00,240 --> 00:00:04,440 Speaker 1: So as voting stations open in the United States, markets 2 00:00:04,480 --> 00:00:09,080 Speaker 1: are preparing for increasing volatility. In fact, we've seen slightly 3 00:00:09,840 --> 00:00:13,600 Speaker 1: reduced levels of trading for European stocks. Your stock six 4 00:00:13,680 --> 00:00:18,600 Speaker 1: hundred currently twenty percent below the average in early trading. 5 00:00:18,680 --> 00:00:20,880 Speaker 1: It also comes ahead of the FED decision, of course, 6 00:00:21,000 --> 00:00:24,280 Speaker 1: during power press conference on Thursday. Bank of England verdict 7 00:00:24,400 --> 00:00:27,760 Speaker 1: on the Chancellor Rachel Reeves's budget would also come later 8 00:00:27,800 --> 00:00:31,360 Speaker 1: in the week, but everything's being overshadowed by whether we 9 00:00:31,400 --> 00:00:33,840 Speaker 1: get clarity and how quickly out of the US. Joining 10 00:00:33,920 --> 00:00:36,159 Speaker 1: US now to discuss Richard Wilson, who is CEO of 11 00:00:36,280 --> 00:00:39,960 Speaker 1: Interactive Investor, which is a subsidiary of Aberdeen with over 12 00:00:40,000 --> 00:00:42,800 Speaker 1: four hundred thousand customers here in the UK. Richard, I'm 13 00:00:42,840 --> 00:00:44,479 Speaker 1: really pleased to have you in this studio. A very 14 00:00:44,479 --> 00:00:47,560 Speaker 1: good morning to you, Mollie. Can we start by your 15 00:00:47,640 --> 00:00:50,920 Speaker 1: thinking on the US election, the results and how it 16 00:00:51,000 --> 00:00:54,040 Speaker 1: might affect your investors. How do you think about today 17 00:00:54,120 --> 00:00:55,720 Speaker 1: tomorrow the volatility? 18 00:00:56,800 --> 00:01:01,280 Speaker 2: Well, first, all the elections historically, I think six of 19 00:01:01,360 --> 00:01:05,480 Speaker 2: the elections since nineteen eighty have been down to one 20 00:01:05,880 --> 00:01:13,800 Speaker 2: fifty voters, so we're in another very close call. I'm 21 00:01:13,840 --> 00:01:16,320 Speaker 2: no better than anyone else that's speculating on the outcome. 22 00:01:17,040 --> 00:01:20,400 Speaker 2: What the markets will want is clarity, and there's a 23 00:01:20,480 --> 00:01:23,560 Speaker 2: risk that, as we've seen in a couple of elections 24 00:01:23,040 --> 00:01:29,119 Speaker 2: in the last couple of decades, it becomes litigus if 25 00:01:29,440 --> 00:01:33,200 Speaker 2: if it's not clear, then we'll have risk off. But 26 00:01:33,360 --> 00:01:36,800 Speaker 2: beyond that, historically, when there is being has been a 27 00:01:36,880 --> 00:01:41,360 Speaker 2: clear outcome that's been very strong for US equities for 28 00:01:41,360 --> 00:01:44,920 Speaker 2: at least for a period. Irrespective of which side of 29 00:01:44,959 --> 00:01:47,760 Speaker 2: the house you're on. I'm not going to call what 30 00:01:47,800 --> 00:01:51,520 Speaker 2: the latest betting is because that moves around. But job 31 00:01:51,520 --> 00:01:54,320 Speaker 2: one is clarity. And then secondly, depending who comes in, 32 00:01:54,880 --> 00:01:57,320 Speaker 2: everyone believes that if Trump comes in, you'll have a 33 00:01:57,920 --> 00:02:02,560 Speaker 2: stronger dollar, you'll have strong gre equities, higher deficit through 34 00:02:02,600 --> 00:02:07,480 Speaker 2: higher borrowing and lower taxes. And the with Camala gets in, 35 00:02:07,840 --> 00:02:11,679 Speaker 2: there's a specially you'll have a slight softer dollar, less borrowing, 36 00:02:11,880 --> 00:02:14,920 Speaker 2: and the US equity markets will be all be up 37 00:02:14,960 --> 00:02:15,720 Speaker 2: a lot of strongly. 38 00:02:15,880 --> 00:02:17,800 Speaker 3: Are you seeing are you seeing much adjustment from your 39 00:02:17,800 --> 00:02:20,440 Speaker 3: four hundred thousand or so customers in terms of how 40 00:02:20,440 --> 00:02:21,880 Speaker 3: they're positioning around this. 41 00:02:23,240 --> 00:02:25,320 Speaker 2: There has been a little bit of certainly much more 42 00:02:25,320 --> 00:02:28,560 Speaker 2: activity I think we've got fifty percent increased activity on 43 00:02:28,800 --> 00:02:32,120 Speaker 2: US markets compared to the normans only much more than 44 00:02:33,040 --> 00:02:35,880 Speaker 2: on the UK markets, but your taxed on UK markets, 45 00:02:35,960 --> 00:02:38,160 Speaker 2: so you get a bit less, a bit less, a 46 00:02:38,200 --> 00:02:42,280 Speaker 2: bit less volume. Not obvious is the answer. There's the 47 00:02:42,360 --> 00:02:45,919 Speaker 2: clear is a Trump trade to your back the mag 48 00:02:46,000 --> 00:02:49,880 Speaker 2: seven and of course the large US stocks drive the 49 00:02:50,240 --> 00:02:53,959 Speaker 2: two prime indices, I mean the Nvidia and Apple kind 50 00:02:54,040 --> 00:02:56,799 Speaker 2: of call the call the index. So you've got some 51 00:02:56,919 --> 00:03:01,080 Speaker 2: activity around that, but we're small frime in the UK 52 00:03:01,160 --> 00:03:03,399 Speaker 2: compared to the US markets, so not much to say. 53 00:03:03,720 --> 00:03:06,560 Speaker 1: Okay, let's think about the UK budget, the biggest increase 54 00:03:06,600 --> 00:03:08,880 Speaker 1: in taxes in thirty years. What did you make of it? 55 00:03:10,720 --> 00:03:15,440 Speaker 2: Well, the majority of the changes were very well telegraphed. 56 00:03:17,000 --> 00:03:24,880 Speaker 2: You've got a spend, tax and borrow agenda with numbers 57 00:03:24,960 --> 00:03:29,359 Speaker 2: that are very high, and the ifs came out and 58 00:03:29,400 --> 00:03:32,480 Speaker 2: the OBI can confirmed that that leads to lower growth 59 00:03:32,520 --> 00:03:36,200 Speaker 2: going forward, a higher debt servicing burden, and of course 60 00:03:36,240 --> 00:03:41,760 Speaker 2: the guilt markets have been a little bit ambiguous about 61 00:03:41,960 --> 00:03:43,760 Speaker 2: their view of that because the yields have gone up 62 00:03:43,840 --> 00:03:47,920 Speaker 2: in two and ten years, basically makes the UK a 63 00:03:48,040 --> 00:03:50,880 Speaker 2: less attractive market to invest. In others because you've got 64 00:03:50,920 --> 00:03:54,600 Speaker 2: a higher tax burden. And the irritation I think for 65 00:03:54,760 --> 00:03:58,560 Speaker 2: many of us is that, whilst there's clearly as a 66 00:03:58,640 --> 00:04:03,960 Speaker 2: fiscal tightrope to walk going after some what would be 67 00:04:04,080 --> 00:04:10,119 Speaker 2: symbolic or illogical taxes like it t reliefs on agriculture 68 00:04:10,160 --> 00:04:14,000 Speaker 2: and business property do undermine entrepreneurship in the country. We've 69 00:04:14,040 --> 00:04:16,960 Speaker 2: got millions of people where the bedrock of our future 70 00:04:17,080 --> 00:04:21,120 Speaker 2: is on entrepreneurship, which comes from family businesses. That's not 71 00:04:21,360 --> 00:04:24,200 Speaker 2: not a sensible way to build growth that it flies 72 00:04:24,240 --> 00:04:25,520 Speaker 2: in the face of your growth agenda. 73 00:04:26,120 --> 00:04:27,960 Speaker 3: So to be clear, you think this budget was gus 74 00:04:27,960 --> 00:04:31,760 Speaker 3: anti growth, yes, no question as a business just as 75 00:04:31,800 --> 00:04:33,520 Speaker 3: a CEO, what are you doing with that increase in 76 00:04:33,600 --> 00:04:36,800 Speaker 3: national insurance you're going to be Does that mean lower 77 00:04:36,839 --> 00:04:38,360 Speaker 3: wages for your team? Are you going to pass it 78 00:04:38,480 --> 00:04:40,120 Speaker 3: up through in terms of high cost for your customers? 79 00:04:40,120 --> 00:04:40,880 Speaker 3: How are you going to manage that? 80 00:04:41,240 --> 00:04:45,240 Speaker 2: I mean, we're in a very competitive environment and the 81 00:04:45,520 --> 00:04:48,800 Speaker 2: option we're we're competing with all the near brokers, the 82 00:04:48,960 --> 00:04:53,719 Speaker 2: US houses, the UK clearing bags, the European houses, everybody, 83 00:04:53,839 --> 00:04:58,160 Speaker 2: the in pension companies. Our option to move price is zero. 84 00:04:59,440 --> 00:05:06,080 Speaker 2: So then you dealing with efficiency or wages or reduced profitability. 85 00:05:07,279 --> 00:05:09,080 Speaker 2: I think Rachel Reeves and one of our inte you said, 86 00:05:09,120 --> 00:05:12,960 Speaker 2: you know, custom companies will be become more efficient as 87 00:05:12,960 --> 00:05:15,120 Speaker 2: if we're not trying to do that every day already. 88 00:05:15,680 --> 00:05:18,480 Speaker 2: So the reality is will either be lower profits and 89 00:05:18,560 --> 00:05:22,440 Speaker 2: therefore kind of lower return and lower ability to reinvesting technology, 90 00:05:23,000 --> 00:05:24,920 Speaker 2: or you look at your wage bill thinking how the 91 00:05:25,000 --> 00:05:25,800 Speaker 2: hell do I solve that? 92 00:05:27,160 --> 00:05:31,359 Speaker 1: Okay, So in terms of what comes next from labor 93 00:05:32,120 --> 00:05:35,640 Speaker 1: for Mansion House, there has been a push to try 94 00:05:35,760 --> 00:05:39,240 Speaker 1: to and in fact a whole group of insurers and 95 00:05:39,360 --> 00:05:43,279 Speaker 1: pension companies agreed to try to put more money into 96 00:05:43,440 --> 00:05:47,440 Speaker 1: UK listed stocks that wasn't mandatory. Does it become mandatory 97 00:05:47,520 --> 00:05:50,280 Speaker 1: under labor? Do they target something? Do they make it 98 00:05:50,680 --> 00:05:54,080 Speaker 1: more compulsory for people to invest in UK listed or 99 00:05:54,200 --> 00:05:55,159 Speaker 1: unlisted assets? 100 00:05:55,800 --> 00:05:58,360 Speaker 2: Yeah? I think well that there are two. There's a 101 00:05:58,400 --> 00:06:01,360 Speaker 2: problem that the UK has, which is compared to some 102 00:06:01,520 --> 00:06:05,240 Speaker 2: other countries in Canada and Australia and a reference quite 103 00:06:05,240 --> 00:06:08,760 Speaker 2: a lot. We have a fragmented pension stock so the 104 00:06:09,320 --> 00:06:14,160 Speaker 2: actual size of the pool that you're allocating is not 105 00:06:14,279 --> 00:06:16,360 Speaker 2: as large as it should be. So there's a task there, 106 00:06:16,440 --> 00:06:20,440 Speaker 2: which is to consolidate pension assets with a big opportunity 107 00:06:20,920 --> 00:06:25,520 Speaker 2: across local councils and the public sectors. Has been well documented. 108 00:06:26,279 --> 00:06:31,120 Speaker 2: The fear that we should have is forcing an allocation 109 00:06:31,640 --> 00:06:36,640 Speaker 2: of risk which is disproportionate. That would conflict with your 110 00:06:36,760 --> 00:06:39,680 Speaker 2: kind of risk management and the members of your long 111 00:06:39,760 --> 00:06:42,600 Speaker 2: term pension holders. So that's not a sensible thing to do. 112 00:06:42,839 --> 00:06:44,719 Speaker 1: But how label will say, how do you get growth 113 00:06:44,760 --> 00:06:47,680 Speaker 1: and how people have been complaining about the fact that 114 00:06:48,080 --> 00:06:50,520 Speaker 1: the UK market is under valued and that we've seen 115 00:06:50,560 --> 00:06:53,200 Speaker 1: a massive decline in investment in UK consul. 116 00:06:53,120 --> 00:06:54,760 Speaker 2: So there are two things there for me. One is 117 00:06:54,760 --> 00:06:56,720 Speaker 2: you've got to create the scale of pension assets so 118 00:06:56,880 --> 00:06:59,560 Speaker 2: that you can make an allocation which is proportionate of 119 00:06:59,720 --> 00:07:03,320 Speaker 2: much bigger base. And secondly, we have been bleeding out 120 00:07:03,520 --> 00:07:05,720 Speaker 2: the UK stock market with stamp due to for the 121 00:07:05,800 --> 00:07:07,880 Speaker 2: last twenty years the British government has sorted in either 122 00:07:08,560 --> 00:07:10,360 Speaker 2: I'm not sure it's too late. It may be too 123 00:07:10,480 --> 00:07:12,840 Speaker 2: late to save it. We are taxing the thing out 124 00:07:12,880 --> 00:07:16,400 Speaker 2: of existence. The UK stock market is untradeable and you 125 00:07:16,520 --> 00:07:19,440 Speaker 2: are taxed to invest in UK companies and it's tax 126 00:07:19,520 --> 00:07:20,480 Speaker 2: free to invest in US. 127 00:07:20,560 --> 00:07:23,600 Speaker 1: It's not complicated, Okay, Richard, thank you so much for 128 00:07:23,720 --> 00:07:25,720 Speaker 1: being with us this morning. Richard Wilson is CEO of 129 00:07:25,840 --> 00:07:28,680 Speaker 1: Interactive Investor. Very good to have you on the program 130 00:07:29,200 --> 00:07:32,520 Speaker 1: and get your views on the UK budget is well 131 00:07:32,640 --> 00:07:35,280 Speaker 1: downing view really on what the UK's done in terms 132 00:07:35,320 --> 00:07:39,520 Speaker 1: of investing in listed stocks, taxing it out of existence.