In Case Of Emergency: Please call America…

I was driving with my three-year-old nephew this past weekend. Anyone who has spent five minutes with a toddler knows it’s a magical age. a whirlwind of developing social skills and surprisingly profound conversations. But then there was abit of a ‘that’s not right’ moment.

"David... if there’s a fire, we should ring 911."

I did a double-take. "That’s an interesting point, mate. But it’s 999 in the UK, not 911."

"No," he insisted with the total confidence only a three-year-old can muster. "It’s 911."

As a father to a young daughter, it’s easy to see why the confusion: the "Americanisation" of our children is no longer just about films; it’s baked into the educational videos and algorithms they consume daily.

With risking sounding like an ipad parent (she doesn’t have one by the way…) We are witnessing a quiet conditioning of our babies and young adults due to the sheer volume of American online entertainers. But as I corrected him on dialing codes and geography, I couldn't help but draw a parallel to my day job.

We’ve created a self-fulfilling prophecy in the UK, not just with our language, but with our capital.

The Great British Exodus For nearly two decades, the prevailing wisdom in the financial industry has been "Global is Best." Specifically, "The States is Best." We have seen a massive migration of UK pension assets away from domestic equities toward the tech-heavy giants of the S&P 500.

In the late 1990s, UK pension funds held over 50% of their assets in UK shares (i). Today, that figure has plummeted to roughly 4% (ii). While diversification is the only "free lunch" in investing, we have to ask: at what cost?

We look at our crumbling infrastructure and political turmoil, and I’m reasonably comfortable saying I’m 100% sure at least some of this audience will have heard others say something to the effect of "Nothing in this country seems to work!" But why would it? We have spent 20 years extracting investment from the very economy we live in and exporting it overseas.

We are surprised the garden is wilting when we’ve been watering the neighbour’s lawn for two decades…

The "Value" in Our Own Backyard Now to be clear, I am not a maverick, I work with and listen to some of the smartest minds in this industry and fundamentally my job is to manage risk and deliver returns, and to a degree, we must follow where the growth is. However, there is a compelling "Value Proposition" in the UK right now that is becoming harder to ignore.

While the US market has been driven to eye-watering valuations by a handful of tech titans (the "Magnificent Seven"), the UK market is currently trading at a significant discount. We are, quite literally, on sale.

• The Trend Trap: Many investors have fallen into the trap of "performance chasing"—abandoning UK value stocks just as they began to show resilience.

• Recent Performance: Over the last couple of years, despite the noise, the UK market has frequently outperformed its peers during periods of global volatility, thanks to its heavy weighting in "old economy" sectors like energy, banking, and commodities. These often prove resilient when there is more fear around the future profitability of ‘new economy’ sectors like technology.

  
  

A Note on Timeframes: It’s vital to remember that investing is a marathon, not a sprint. Short-term trend-following often leads to buying high and selling low - the cardinal sin of wealth management and as such we’ve been steadfast in our overall investment approach and along with client agreements have made minimal changes to portfolios other than converting from growth to income propositions due to natural lifecycles.

Being the Change: The Capital Conundrum If we want a country that "works," it requires more than just political willpower; it requires mobilised capital. For too long, the UK has suffered from a "deployment gap." If we want to retain our British identity and ensure our returns remain British, we must stop looking across the Atlantic for every financial solution.

Recent policy shifts, signalled by Chancellor Rachel Reeves, suggest a move toward "strong-arming" private capital into active investments.

While the intent is to fuel UK productivity, the execution risks a dangerous extraction. By creating restrictions that nudge ISA holders away from cash and into mandated investment vehicles, we risk destabilising UK-based deposit takers and people essentially withdrawing their hard earned to ‘put under the mattress’ which means we’re no further forward.

We’ve seen human rebellion before when government start to overstep their mark

The "Window Tax" A classic example of a policy that seemed clever on paper but changed the physical landscape of the country.

• The Intent: To tax people based on their wealth (the more windows you had, the bigger your house, the more you paid) without the intrusiveness of an income tax.

• The Reality: People simply bricked up their windows to avoid the tax.

  
  

When we force capital out of the domestic banking ecosystem in favour of global equities, we aren't just moving money; we are removing the bedrock of growth from our own high streets. It creates a "leaky bucket" effect:

• Liquidity Drain: Traditional UK banks lose the deposit base required for local lending.

• Global Extraction: Capital is diverted into global trackers where it feeds Silicon Valley or emerging markets, rather than British SMEs.

  
  

The Impossible Task

We are essentially asking the British public to solve an Impossible Task: to act as the primary engine for national infrastructure and "Build Britain," while simultaneously competing for global-standard returns in a high-inflation and high-tax environment. To demand that savers shoulder the risk of "investing for the nation" while restricting the safety of cash deposits is a pivot that feels fundamentally disconnected from the reality of the British taxpayer.

True "change" shouldn't involve coercive extraction; it should involve making the UK such an attractive destination for its own capital that looking across the Atlantic becomes the second choice, not the default.

Just as I’ll keep gently reminding my nephew that we call for the Fire Brigade, the police and the ambulance on 999, not 911, perhaps it’s time we look at our portfolios and ask if we’ve drifted too far from home. If you want to see a thriving UK PLC, you have to be part of the investment that builds it.

Success, much like language, starts at home.

References:

(i)             New Financial, Unlocking The Capital In Capital Markets. Release date: March 2023.

(ii)            ONS Statistical Bulletin, Ownership of UK quotes shares: 2024. Release date: 29^th January 2026.