Rachel Reeves’ major advertising push to re-invigorate the London market could lump the City with a £120m bill, new documents have revealed.
The campaign, which is being led by the Investment Association, was announced as part of Reeves’ Mansion House package where the Chancellor made her pro-business plea to the City.
But smaller financial services firms are beginning to weigh pulling out of the plan due to the hefty price, according to Politico.
The documents – prepared by the Investment Association (IA) – state advertising giant WPP will propose three scenarios for the campaign costing between £15m and £40m.
The range of advertising formats will include a “hero” film to encourage Brits to own stocks, social media content, TV slots and digital ads.
But firms will also bear the brunt of agency fees, production fees and variable costs including the delivery platforms used and how many “bursts” of advertisement activity companies decide to conduct throughout the year.
The steering group members will the cover the costs of the campaign, documents seen by Politico reveal.
Last month it was announced Sasha Wiggins, the chief executive of Barclays Private Bank and Wealth Management, would chair the campaign to boost retail investment.
The group ranges from the financial services behemoths to smaller firms including the likes of Natwest, Lloyds, Barclays, HSBC, Schroders, AJ Bell and Robinhood UK.
The Treasury will not be involved in the funding of the campaign.
Firms will face a different bill depending on their size, with the IA charging those with under 1,000 staff between £250,000 or £500,000 as a first-year contribution whilst medium-sized firms (1,001 to 9,999 staff) would be in the scope of £500,000 to £1m.
For firms employing over 10,000, the contribution could be as high as £2m.
The companies will also have to cover membership and legal costs.
However, the final bill for the campaign, which will begin next April, is yet to be baked in with the firm’s costs yet to be finalised. Additionally, whilst WPP will make its play to be the campaign’s nominated agency this week, an open competitive pitch continues for advertisers continues.
The Investment Association and Treasury have been contacted for comment,
Reeves’ bid to revive the London market
The Thatcher-style investment revolution comes as amid a bruising period for the London Stock Exchange, with companies blasting the market’s lack of liquidity.
Earlier this year, money transfer firm Wise ditched its primary listing in the UK in favour of the US and rumours that Astrazeneca – the City market’s most valuable company – would follow suit have ramped up after the juggernaut paused a £200m investment in the UK.
Reeves introduced the “Tell Sid” campaign amongst her Leeds Reforms, where the Chancellor is looking to double the real growth rate in financial services net exports over the next ten years.
But plans have faced some back lash with former boss of the London Stock Exchange Group Xavier Rolet stating stewards of UK capital markets had focused on “gimmicks and quick headline-grabbing fixes” instead of offering meaningful tax incentives.
“The revitalization of UK markets requires an urgent recalibration of their regulatory and fiscal framework,” he wrote in a recent LinkedIn post earlier this year.
