The belief gap at the heart of the City's big moment
The Leeds Reforms have handed financial services a rare opening. Most firms are about to waste it.
In July 2025 the Chancellor announced what the Treasury called the widest-ranging reform of financial regulation in more than a decade. The Leeds Reforms, and the Financial Services Growth and Competitiveness Strategy behind them, set an unambiguous ambition: to make the UK the number one destination for financial services by 2035. The trade bodies applauded.
The law firms produced their client briefings. A year on, the Financial Services and Markets Bill has passed the Lords and reached the Commons, carrying ring-fencing, Senior Managers and Ombudsman reform with it. By any conventional measure, the sector has won.
Won where, though? In Whitehall, certainly. In the country, not remotely.
The gap nobody has priced in
Step outside the Square Mile and the public conversation about finance has, in our view, barely moved since 2008. “Cutting red tape for the City” is unlikely to sound like a growth story to much of the public, and more likely to sound like the prologue to the next crisis.
In YouGov polling in May, 42 per cent of Brits said they do not trust financial institutions, against 53 per cent who said they do. A majority trusts, but among 35- to 54-year-olds the split is 49 to 45, and a large minority starts from suspicion. It is not a margin of goodwill that reform can bank on. Talking is not the same as being believed. In the same poll, 48 per cent of Brits said a financial institution had contacted them in the previous six months, and 52 per cent of those who heard from one did not find it valuable.
The distance between what policymakers believe and what the public believes is what we call a belief gap, and belief gaps are not a cosmetic problem. They are a political risk sitting on every balance sheet in the sector.
Reform built without public consent is built on sand. Rachel Reeves promised to regulate for growth and not just for risk, and the Burnham government is reported to be keeping that course. But the politics are already moving: Chancellor John Healey delivers his first Budget on 28 October, and TheCityUK has written to him warning against sector-specific taxes. Few promises of this kind survive contact with a scandal.
One mis-selling episode, one collapsed fund with retail money inside it or one bank failure could send the deregulatory agenda into reverse, because little political capital has been banked to defend it. Ministers are quicker to defend policies the public supports than those it does not.
Asking the country for its savings
And the stakes are rising, because the Government is not merely loosening the rules. It is inviting the public in. Since April, banks have been allowed to suggest investing to savers with cash idling in low-interest accounts, and Long Term Asset Funds can be held in Stocks and Shares ISAs, taking private assets into the mainstream ISA wrapper. An industry advertising campaign, Invest for the Future, launched in April to make the case for investing. A sector that, in our experience, has communicated mostly through compliance departments is now asking ordinary households for their savings. You cannot do that and remain a stranger to the people you are asking.
The firms most exposed are the ones with the least public credit to draw on. In our experience, investment managers, asset managers and private equity houses barely feature in the public imagination, and where they do, the picture is unflattering. Private equity in particular has let its critics define it: the asset stripper, the debt loader, the buyer of care homes and high street names. We think the caricatures persist because the industry has rarely told its own story in a voice the public trusts.
The messenger, not the message
The instinctive response is a corporate campaign, and it is the wrong one. The public discounts what the City says about itself, for the sound reason that the City is talking its own book. The YouGov poll points the same way: among Brits who did not find institutions’ outreach valuable, 54 per cent said it felt automated or impersonal and 53 per cent said it felt more promotional than supportive. Belief tends to move when credible third parties carry the evidence, not when a bank buys a wrap on the Tube.
None of this means covert advocacy. Regulators are tightening enforcement on financial promotions, and rightly so: an FCA-led sweep by 17 regulators targeted illegal financial influencers in April, and firms remain responsible for the promotions they make or cause to be made. But genuine independence needs no disguise. Voices engaged openly, armed with evidence that withstands scrutiny, persuade precisely because they have nothing to hide.
So shaping the narrative, the opportunity the competitiveness agenda genuinely offers, means something more disciplined than visibility. It means measuring the belief gap precisely: what do the audiences that matter actually think about your firm, your asset class, your role in their retirement? It means identifying the messengers those audiences already trust, and equipping them with evidence worth repeating. And it means doing this consistently over years, not in the fortnight after a hostile headline. Consent is a stock, not a flow. It is accumulated in peacetime and spent in a crisis, and we think most of the sector is starting from empty.
The window is open. The Government has made financial services one of eight growth sectors in its Industrial Strategy and asked the industry to help make the public case. Firms can treat that as a lobbying exercise and a compliance project, and hope the political weather holds until 2035. Or they can recognise it for what it is: a rare invitation to close the gap between what one of the country's most successful industries does and what the country believes about it. The firms that take the second path will own the narrative. The rest will spend the next decade responding to it.
If you're thinking about how your organisation can close the belief gap with the audiences that matter most, we'd be happy to discuss how to measure it and shape the narrative.
Get in touch at info@wearespqr.com
