Finimize CEO Carl Hazeley sits down with Richard Flynn, Managing Director of Charles Schwab UK, to unpack why the UK remains last in the G7 for retail investment participation – and what governments, regulators, and the industry itself can do about it. 
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Drawing on Schwab's 50-year history of dropping barriers to entry, Flynn makes the case for incentives over compulsion, an even playing field on stamp duty, and a careful, trust-first approach to AI in investing.

Why the UK lags on retail investing

Despite retail participation growing over the last five years, the UK still trails its peers – and Flynn argues the government's approach is part of the problem. 
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"Trying to compel people to do something is generally less successful than creating an environment that incentivizes them to do it," he says, pointing to Aesop's fable of the North Wind and the Sun. 
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The contrast with the US is stark: roughly 40% of the US stock market is owned by retail investors, and portfolios are dinner table conversation.

From participation to engagement

Zero-commission trading and fractional shares have made investing more accessible than ever – but access alone isn't enough. 
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"The big difference – and this is where the UK has a challenge – is turning that participation into engagement. That's the challenge we're all trying to solve." 
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For Flynn, that starts with credentials, clarity, and jargon-free communication: "Nearly the worst way to engage with retail investors is to create what they think is a world that's beyond them."

Using AI "intentionally"

Schwab's own research shows some 79% of Gen Z and millennial investors already use AI in their investing platforms or research, versus just 22% of older generations. 
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But Flynn is clear that adoption can't come at the cost of trust: "Money is driven by trust. It doesn't matter how much you're talking about. I personally prefer the phrase 'augmented intelligence' rather than 'artificial intelligence' – it should be a tool that helps you with managing your decisions, but not one that necessarily makes them for you."

The policy lever: scrap stamp duty

Asked which policy change would move the needle fastest, Flynn points to stamp duty on UK shares – a friction most other markets don't have. 
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He says that removing it would cost the government in the short term, "but you've got to consider the long-term growth of what you're trying to achieve." 
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Alongside that: financial education in the curriculum, and structures that make investing easy rather than intimidating.

Trust, Talk to Chuck, and the Finimize partnership

Flynn also reflects on Schwab's famous Talk to Chuck campaign, the enduring power of a founder-led brand, and why Schwab partners with Finimize: a shared commitment to clear, straightforward information that helps investors engage with their financial futures – "giving people the confidence to move from just participating in the market to really engaging with it."
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Watch the full conversation for Flynn's take on historical bubbles (including the investor who lost it all in 1720: Sir Isaac Newton), personalized indexing, and how Schwab handles blockbuster IPO moments.

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Video transcript

Carl: My guest today is Richard Flynn, Managing Director of Charles Schwab UK. Charles Schwab has $13 trillion of assets, has been around since 1971, handles something like 10 million trades a day, and has 39 million brokerage accounts around the world. It's a massive, massive company. Welcome – delighted to have you here.
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Richard: Great to be here. Thanks, Carl.
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Carl: It's a perfect time for this conversation for a few reasons. One of those reasons is that the UK government, through a handful of initiatives which we can get into, is trying to get more and more people investing. That's great, but it's something Charles Schwab has been banging the drum on for decades. How do you see that, given you've been on this path for so long already?
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Richard: Well, I personally joined Schwab in 2005, and quite a lot has happened in the UK in the last 21 years – certainly in terms of retail participation, which has grown. The government is trying to do more, but if you look at the numbers over the last five years in particular, retail participation has increased, yet we're still lagging. I think we're the lowest in the G7 in terms of retail investment participation.
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So the government is trying to help people to invest, and it has a vested interest in doing that. When you look at the savings rate versus the investment rate, that's a key difference. There's a cultural inclination for people to save cash, and a fear of investing, and the government has a lot of work to do to get the UK to a place equivalent to the US, where over the last 40–50 years – as long as Charles Schwab has been running as a company – there has been a significantly increased participation rate across all sectors of the population.
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One of the interesting things when I look at it is how the government is going about doing this. There's a sense that they're trying, with the ISA reforms and a lot of the messaging, to compel people to invest – to move from cash into stocks or funds. In our experience, trying to compel people to do something is generally less successful than creating an environment that incentivizes them to do it. You can't really force people to do something. The key is to create an environment where they come to the conclusion that it's the right thing for them.
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I always think back to Aesop's fable about the North Wind and the Sun – two great forces competing to get someone to take their jacket off. The wind blows and blows, and the person just pulls the jacket tighter. Then the sun gradually dials up the heat, and the person takes off the coat of their own volition. It rings true for a lot of things – that's why these fables still resonate 3,000 years later. But in terms of the UK's retail investment conundrum, it's very relevant.
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Carl: I completely agree. And maybe to build on that: the industry as a whole, for better or worse – mostly for worse – hasn't done a good job of getting people comfortable with the idea of investing in the UK, or shown them how to do it. It's been all fire and brimstone and risk warnings to the eyeballs, so people have understandably shied away.
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If all of a sudden the government turns around and says, "Actually, come on, guys" – as a retail investor myself, I've got zero incentive to engage with that. I've been shunned, I've been pushed aside, whether by government or institutions. Why now, when it suits you, should I come along and do what you want?
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I think there's a cool contrast with the US, where there was probably a fair amount of cynicism in the '70s and '80s when the US was going on this journey. But it was a sustained campaign – not a year or three years, but decades of work. And now, what is it, 40% of the US stock market is owned by retail investors. Everyone's got a 401(k). It's dinner table conversation – it's part of the culture. If that's the direction of travel here, great. I guess I'm optimistic yet skeptical that, as an industry, we've all alighted on that solution. I think Schwab has, in my experience, but I don't know that your peers and competitors have.
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Richard: When I look at the US and the UK – and I travel there quite a bit, and get the benefit of exactly what you've described, sitting and chatting with people at bars about their portfolios, which you don't tend to do in the pub in the UK – there's a cultural gap there. Where that comes from, I feel, is the nature of the relationship people have with companies: the visibility of some of these companies as investment opportunities, and the relationship they have with their shareholders.
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When you look at successful investors – and they're probably a little more prominent in the US than in the UK – you can learn from them about the power of compounding, the power of long-term strategic thinking, and the way investors can effectively plug themselves into the capitalist system in which we live to help themselves. And it doesn't have to be at significant levels of money. That's the big difference that's happened as a result of innovators and pioneers like Charles Schwab, who dropped the barriers to entry.
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You mentioned we've been running since the early '70s. 1975 was the big break for Schwab as a business, because that was when the SEC effectively outlawed fixed commissions. It was May Day 1975. Chuck realized there was an opportunity to say to all the subscribers of his investment newsletter – equivalent to Finimize, I guess – which was giving recommendations to his subscribers: "Look, you would pay one of the traditional Wall Street wirehouses $200 – and this is back in 1975 money, so a lot of money – to buy these shares. I will take that order for you, get it executed, and do it at half the price."
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That was the birth of discount broking. Through scale, it allowed those commissions to drop and drop and drop, all the way to the zero dollars that we and other brokers charge today. So those barriers to entry have dropped and dropped, which has increased participation in the market. But the big, big difference – and this is where the UK has a challenge – is turning that participation into engagement. That's the challenge we're all trying to solve.
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Carl: There are a couple of routes I want to go down. One is what success looks like – and maybe I'll come back to that, because it's quite a nice overarching theme. But you talked about innovation. You talked about Schwab and its big break, and being competitive on price. Let's rewind 10 or 15 years: we've got zero-commission platforms coming in, we've got fractional shares. We've done a lot of work as an industry around accessibility and price – at least headline price – seeming to be the big lever. We're pretty much there, I'd say, in terms of that frontier being table stakes.
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A couple of thoughts, I guess. One is: how do you think about innovation going forward, and where do you think the next frontier is? And with price in particular – for a massive business, as we've said – how do you think about continuing to grow that business in the context of low-cost competitors?
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Richard: Okay – there's a lot in there. First off, in terms of what success looks like for our business, and really the foundation of it: Chuck is still very active as chairman of the company, and he always brings us back to one thing – just do the right thing by the client, every time. If you look after the individual client, the business will be fine. That has always rung true for us. Every business decision we make, every strategic decision, we're thinking through client eyes: how can we make the right decision here to help people? That, I think, distinguishes us from a lot of companies that have multiple different objectives. Our objective is very simple: put the client first. It's why we have 40 million clients globally, and why we've amassed the trillions of dollars of client assets that we have. It's the trust people have in our ability to look after their interests. So success for us is maintaining that focus – because it's quite easy for a large, global company like ours to find itself fighting multiple battles on different fronts. Bringing it right back to the origin is something that will always be our focus.
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In terms of the future: if you look at the structure we've got in the UK now, and globally, with low-cost brokers and a real proliferation of platforms people can use, there are a lot of options out there – and a lot of noise. You and I have talked about this before: the best thing for investors is typically to try and ignore the noise, and focus on very clear, straightforward, jargon-free information that will help you make rational decisions – which are all too rare in investing.
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So then you look at what's next in the industry, and what's going to make the difference in the coming years, particularly with so much competition. There is incredible technological change happening right now. AI entering our industry – and countless other industries – is going to present a lot of opportunity for people. I'm not just talking about investment opportunities; I'm talking about how people can live their lives, and how people can find ownership of their financial future. Some of the surveys we've done of investors in the UK have shown remarkable appetite, particularly among young investors – Gen Z and millennials – to use AI in their investing platforms and their investing research. The numbers are incredible: I think 79% of Gen Z and millennials are currently using AI as part of their investment platform or research strategy, versus 22% of the older generations. That's a really stark difference, and it's one that every retail investment company is aware of, for sure.
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Carl: Do you think there's a risk here that the way retail investors are using AI runs – or maybe has already run – ahead of banks' and institutions' ability to serve them the way they want with AI? The reason I ask is that you've probably seen it yourself: there'll be a smart piece of content produced somewhere in a financial institution, and someone wants to run it through an AI system to get multiple versions of it for multiple different ICPs or client types, and they get absolutely slammed by legal and compliance and just can't do anything with it.
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Richard: That's the biggest issue with AI. We, like every other company, are investing heavily in AI, but very, very intentionally – considering, obviously, the legal ramifications of it: where does the advice come from, are the people who operate the LLMs responsible for the output, and so on. But fundamentally, it's again about bringing it back to what the right thing is for clients.
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In our business, trust is the most important thing. Money is driven by trust – it doesn't matter how much you're talking about. You've got to trust the company you're investing in. You've got to trust the people you're investing through. You've got to trust that your money is secure – that you're operating in a system where the assets you have worked for are going to be secure. Trust is absolutely everything. And I think the current issue with AI is that no matter how you're using it, you can't trust it 100% – at the moment. So to implement that and embed it in a system whose foundation is the trust a business has with a client – that's why I would argue banks were probably a little wary about the use of AI in that particular example.
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It's definitely one of the things we're thinking about as a business: how do we not compromise the trust we have spent decades building with our clients, and instead help them understand that we are using AI very carefully, and that we will only use it to benefit them – whether through their client experience or through our operational procedures. We're very fortunate because of our scale: we have the ability to service clients with humans. There are a lot of smaller fintech firms coming into the market with fantastic platforms and fantastic tech, but they've got chatbots answering client issues, client questions, and client complaints. Fundamentally, we know clients prefer to speak to humans, and I don't think that will change too drastically, particularly when we're looking at larger-scale investing.
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One of the other interesting things about AI is the regulatory environment. It's not just banks, brokerages, and institutions within our industry that are harnessing AI and working out the best way to use it – regulators globally are currently working out how to regulate AI. The FCA is working hard: the Mills report is going to be published soon, which I think is going to be an interesting piece of work. And I think the UK is in a pretty good place from an industry perspective, in terms of understanding that AI could be transformational but also carries some risks. The engagement between the regulator and firms in the UK has been really strong in the field of AI.
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Carl: If I think about the challengers across the board – and pick your area of fintech – there's been a bit of a dynamic historically where challengers are great at getting, let's take investing, some fun money in: zero commission, fractional. But as soon as I have a windfall or an inheritance, or want to do something you'd objectively say is serious – like buy a house or plan for my kids' future – that tends to happen away from the challengers and with the large established players. Do you think that's just down to the human element, more often than not?
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Richard: There's a psychological element to it, for sure. People do tend to outgrow things – and not just in the context of their relationships with brokers or financial institutions, but everything. You move from a house to a bigger house – hopefully. Things change. When you consider your journey financially, there are very few institutions likely to be able to serve you from childhood through to retirement. So it's natural that people will find different stages of their lives suited to different institutions, and that's fine.
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People are a little less handcuffed to their institutions than they used to be. And again, the regulator has done well in enforcing an environment where people have the freedom to choose and to move, and where firms can't hold on to them through exit fees or things like that. I think that's important – it creates a dynamic of open, competitive markets, which is a key part of our industry.
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From a generational point of view, we're again fortunate because of our scale: we can attract young investors, and we can look after ultra-high-net-worth people in retirement, or trusts, or entity accounts. Not everybody has the ability to do that. So a lot of fintechs and a lot of people entering the market have to have a very specific target market – not just for their business to be successful, but for those clients to get everything they need. You can't serve everybody with absolutely everything. You have to focus on what you're good at.
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Carl: There's a through line in everything you're saying, which you touched on explicitly earlier: engagement. So let's spend a bit of time on that. How do you engage retail investors?
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Richard: It's a good one. Well, firstly, you have to position who you are – your credentials. Same as with absolutely anything in business: nobody's really going to listen to you unless they have an understanding of who you are. And again, for us as an established business, one of the biggest in the world, as we've talked about, that's a pretty handy calling card to put in front of people. It immediately says: these people might be worth talking to.
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One of the things that's really important – not just to Schwab, but in our industry – is clear, jargon-free English: communicating with people in a language and in terms that they understand. When I entered the industry 24 years ago and did all the exams and the rest of it, you realize there are probably two or three languages in this world. A lot of it is nearly intentional – trying to make things look more complicated than they need to be. And for retail investors, nearly the worst way to engage with them is to create what they think is a world that's beyond them. So speaking to them in jargon-free English is really important, and I do think the Consumer Duty has been very effective and impactful in forcing firms to reconsider how they communicate with investors.
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And then it's about being clear about product ranges, clear about fees. Clarity is what people want. When you speak to investors of all ages and all wealth brackets, people really value clarity. They will engage with you if you've got that position and reputation, you're able to show your credentials, and you speak with them with clarity and purpose.
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Carl: I think the credentials thing is important for getting their attention in a crowded, attention-deficit sort of market. And then engaging with – speaking to people normally, frankly – is how you engage and retain them. So, Finimize and Charles Schwab UK have worked together for a number of years now, across retail investor events where we've had thousands of attendees, hundreds of thousands of people viewing recordings of events, and tens of thousands of people reading the content we produce together. Could you maybe share a little about the partnership from your point of view, and how it's gone?
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Richard: Yeah, well, I think it's been great. We've been really happy with Finimize – as you mentioned, the engagement on the events in particular has been really strong. We decided to partner with you because there was a commonality to the messaging: encouraging participation, reducing the noise, and having very clear information that will allow people to engage more with their own financial futures.
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When we look at what we've been happiest with around Finimize, the global community is something that's really important to our international growth. You've got investors all around the world, as we do, and there are a lot of commonalities across investing globally, but also regional differences – culturally, and in how people engage. I think that was something we shared. We realized we want to communicate with as many people as possible, in as straightforward a manner as possible, and give people the tools to succeed. I think that's the real thread that runs through our offering and your connection with your subscribers and clients. So that was a key part of why we connected with Finimize.
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The second thing, obviously, is a generational thing. We have clients of all ages, but the global investing market is a crowded place now, particularly for younger investors, who have plenty of options of where to go. So we wanted to get in front of some of those people who may or may not have been familiar with the story of Schwab and what Chuck did in America. In the States, Chuck is a household name – everybody knows Charles Schwab; it's part of the culture there. Less so in other markets. So our partnership was part of amplifying our messaging – and the shared messaging we have with Finimize about retail participation, and actually giving people the confidence to move from just participating in the market to really engaging with it.
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Carl: It's absolutely a partnership in my eyes, in that I say to the team, we have to earn your interest – there's a bit of a pun there – we have to earn our readers', our listeners', our viewers' interest every single day, in every single instance. So I don't take for granted that people are with us on their lunch breaks, on their commutes, maybe in their beds, depending on what time zone they're in.
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Richard: We're in the eyeball economy. Everybody's competing for attention.
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Carl: Well, exactly. And so when we're able to work with someone like Charles Schwab and bring people together, that convening power is really powerful. When you came in, it was pretty clear that your thing – I was going to say your whole thing; it's not your whole thing, but an important thing – was straight talking, plain talking. That's music to my ears. We're aligned. And I say this to almost anyone who will listen – I get on my soapbox about this – Finimize lives in service of modern retail investors, whoever they are, however they want to engage. That's the journey we're going on, that's the direction of travel, and we're not changing that. If anyone wants to come on that journey with us and reach these investors and help them along the way – absolutely fine. But we do it on my terms. And your terms are my terms, so it was an easy partnership to get going, and I'm glad we've done it.
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Richard: Yeah, absolutely. It's worked really well.
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Carl: Obviously, there's tons of conversation around how to incentivize retail investors in the UK – we've got the Get Britain Investing campaign, to name the biggest among them. From your point of view, what are the policy levers that you think are going to have the most success, and what are the ones you'd like to see?
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Richard: In terms of policy levers, there are frictions that other countries don't have. Chief among them in the UK is stamp duty – obviously, that debate has raged for quite a while. We've talked about it before, I think off camera, but there's an irony to the fact that if the government were to relent and remove stamp duty from investing in UK companies or UK shares, it would cost them. But they have to consider the upside – and that really is what investing is about. It's going to cost you, but you've got to consider the long-term growth of what you're trying to achieve.
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What that would do at a stroke is incentivize institutional investment – because remember, institutions have to pay that stamp duty as well – and it would allow an even playing field. And I'm saying this on our behalf as a US broker: if we want to promote investing from UK participants and just get people in the UK investing, that is a very straightforward policy to consider. Obviously, it's discussed regularly at the highest level.
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Beyond that, you have to show people the benefits of investing and, again, incentivize people to understand it. Make it part of the curriculum – teach young children, teenagers, and students how to manage money. There was a report I read recently, fronted by Rishi Sunak, about financial literacy, with some absolutely breathtaking, depressing stats about how poor knowledge is across the country around the risks of staying in cash and the risks of inflation. Those are very fundamental basics, and once people understand those risks, they are at least in a position to consider: now that I know this, what is the right thing for me? And then, if a structure is set up that makes it easy for people to invest – a lot of the practical obstacles the industry used to have are gone. You can invest small amounts regularly, you can invest at low cost or no cost, you can move brokers easily, and you have a huge choice of where and how to invest. The industry has created these things. The question is, again, moving from participation towards engagement. That's the big next step for the UK.
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Carl: I have a crazy idea. I'm going to put it forward – tell me why I'm wrong. If you agree it could work, then let's march down to Parliament Square. The UK government gives every adult £1,000 in a tax-free investment account. You can't take it out for five years. You have to invest it – if you do nothing for five years, you can't touch it. You have to make at least one investment, and then you can withdraw after five years.
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I think that forces a national conversation about investing. Everyone's going to say, "Oh, what did you buy? What are you going to do? Maybe I'll put £200 in this and £200 in that." It gets people learning by doing, which, from a Finimize point of view, we know is a great way to get people investing. And it doesn't cost that much. Look, don't get me wrong, it costs a bomb – give or take £60 billion. But that's the pensions bill in a year. So you just take everyone's pension for a year and say: you are getting your pension, we're just giving it back to you in a slightly different way.
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Richard: Well, in the US, they're doing that now with newborn babies. Four million newborn babies every year will receive $1,000. So that's an interesting comparison between this hypothetical in the UK and where the US is. And the impact – not just on the market, but on these people's lives – will be transformational. Again, it's back to the issue of incentivizing versus compelling. With something like that, you're giving people a reason to engage with the stock market in a positive way, and in a way that is relatively risk-free for them.
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Carl: Well, exactly. It's free money. Government money is always free money.
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Richard: But yes, it comes back to the incentivization and participation piece. You're getting people engaged in the market, but you're not forcing them – in the way that the ISA reforms were arguably trying to force people to do one thing and not the other.
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Carl: Exactly. I guess my other big policy would be – everyone has to give the government their email address in order to pay tax, or for the NHS. Sign everyone up to Finimize. Give them a Finimize Pro account.
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Richard: Well, we lobby the government on a few things. I'll put that into consideration.
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Carl: Oh, I appreciate it – thank you! The other big way to incentivize people, I guess, is marketing, is advertising. And I'm reminded of the Talk to Chuck campaign that you had, what, 20 years ago at this point. Can you maybe share a little about what that was and how it all worked?
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Richard: Well, we've talked about trust. Trust is absolutely central in finance, in personal finance, and in human psychology generally – you need to trust people to do business with them. The Talk to Chuck campaign was incredibly successful because, at that point, Chuck had been running the business for 30 years, so we'd established the credentials we talked about. He was very, very visible – one of the first founders and leaders of a business to put himself in the marketing and his name on the door. You can't think of many companies, certainly at our size, where the founder's name is the name of the company. And that's why he and his approach are fundamental to how we run the business today.
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The reason the Talk to Chuck campaign was so successful was that, for a lot of our clients, it felt like if they were speaking to someone who worked for Charles Schwab, they were getting the same kind of guidance they would have gotten from Chuck himself. That's a really foundational principle in how we interact with our clients, and it will continue to be a principle for the next 50 years.
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Carl: Gotcha. That sense of one-to-one, high-quality advice is probably something retail investors around the world would kill for right now, given the massive IPOs that are coming – and that have come. I'm thinking SpaceX; I'm thinking Anthropic and OpenAI before too long. And I just wonder how a firm like Charles Schwab approaches these massive events, where there's a massive call on your advisors' time and a ton of competition from other brokers. How do you think about it?
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Richard: It's a great challenge, but it's a phenomenal opportunity to have engaged conversations with clients. People invariably come to us at a time when they're making decisions, and they're looking for help with making those decisions – whether they're making the decisions themselves, or they want to partner with us to help advise them. We have the ability to handle things as they see fit.
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Fundamentally, we talk to clients about the importance of diversification, and about risk as it relates to these kinds of emotionally driven decisions. We are all human – every single one of us is subject to human emotions. Fear and greed drive an enormous amount of decision-making, so what we try to do is apply some reason and logic to helping people make those decisions. At times like this, it's really important to do that.
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Equally, when people are engaged, you want to promote that engagement and say: okay, well, if you are looking at these companies, let's look at other areas – companies that might also be of interest, but that you may not have read about. Right now, for example, we have a phenomenal tool called Schwab Investing Themes: 45 different themes, I think, which investors can explore once they have a Schwab account. They cover incredibly interesting areas – space exploration, which is a big one right now, renewables, pets, water technology. So if people are thinking, "I want to invest in themes which are likely to be either dominant or growing in the next decade-plus" – I mean, imagine if someone had introduced you to microchips as a theme 10 years ago. A pretty cool theme to have been shown.
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And then there are areas where, particularly for younger investors, values are arguably more important than valuations. They can look into themes like companies creating cancer treatments, where investing in those companies can result in major breakthroughs. That's something where people will make a decision based on what they're really looking for as an individual, rather than what's just bright and shiny and taking up headlines in every newspaper of the day.
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Carl: It's interesting – you talk about values on the one hand, but also emotions on the other, and it's doing a couple of jobs. It's allowing people to invest with their values, but also de-risk the emotional piece. So let's say there's a hot space company or a hot chips company, or what have you. Rather than making the emotional decision to maybe chase it at astronomical valuations – pun intended – maybe I go into a basket. So I've had the exposure, I've scratched the itch, but I'm not overly exposed in case gravity takes hold. So many science references in that sentence – I loved it.
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Richard: But there's also the reality that a lot of people who have current exposure to the market through index funds – that itch is scratched, because a lot of these stocks, once listed, will be part of the index funds they hold. And again, that's a knowledge piece: do you know enough about the holdings you have to understand what you are currently holding within those baskets? Companies like ours are able to talk to our clients about that and say: okay, let's have a look at your portfolio. Let's see what your exposure is. Let's see how it correlates with your risk appetite and your stated goals.
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There are some really cool products we have in the US, which we're hoping to expand globally, that allow you to create your own indexes – personalized indexing. It's been really successful in the US, because you can take out the companies you don't like, put in the ones you do, and effectively create your own index. It's innovative, but it gives people control and diversification.
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Carl: It also – I asked earlier whether AI tools could run ahead of what firms like Schwab can provide, and the answer is: well, no, you're doing exactly what people are.
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Richard: But again, trying to harness it in a safe way. I think that's the key. The risk with AI, particularly with relying on AI to manage your portfolio for you, or to manage your own investment decisions – I personally prefer the phrase "augmented intelligence" rather than "artificial intelligence," because it should be a tool that helps you with managing your life and managing your decisions, but not one that necessarily makes them for you.
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Carl: We're almost at the end. I'd love to just get your two cents on the most outlandish or wild headlines you've seen in finance recently. There's been a lot of talk about bubbles recently – even this week – and the wisdom of the crowd.
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Richard: I quite like the history of investing, and what I've been reading recently is more about historical bubbles, and how history sometimes rhymes without necessarily repeating. The South Sea Company bubble of 1720 – are you familiar with that one?
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Carl: I missed that one.
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Richard: A couple of really interesting things about that bubble. It was huge, it burst very fast, and a lot of people lost a lot of money. One of the people who lost nearly all of his money was Sir Isaac Newton. So when you think about the wisdom of investors – he was a polymath, an exceptional scientist, probably one of the smartest people this country has ever produced. And he was still subject to the same emotions about investing – fear and greed – as the rest of us. He lost everything, and the quote attributed to him at the time was: "I can predict the movement of the stars, but I can't predict the madness of men." I think about that in the context of bubbles.
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The other thing I learned reading about this recently: the share price of the South Sea Company went from £50 to, I think, £1,000 within a few weeks – and then, bang, gone. It was the first real debt–equity scheme, and there were repercussions for the people deemed to have pumped it up. In fact, the Chancellor of the Exchequer at the time, who had taken £20,000 of shares in the company in return for his political support, was locked up in the Tower of London. I just think maybe the FCA could consider that – those Tower doors still lock. The FCA could consider reading that book and thinking about future enforcement for the people behind the bubbles.
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Carl: Lesson to be learned. Fantastic. Richard Flynn, it's been an absolute pleasure. I've learned tons, and I'm sure everyone else has too. Thank you so much for joining me.
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Richard: Thank you, Carl.