Poor Investor Communication Is Undervaluing UK PLC

There is no shortage of debate about the competitiveness of UK capital markets. Policymakers are reforming listing rules, overhauling the prospectus regime and looking for ways to channel more retail capital into equities. The ambition is clear: make London a more attractive place to list, invest and grow.

But there is a more immediate problem holding UK PLC back — one that regulation alone cannot solve. Too many listed companies still communicate with shareholders in ways that are outdated, inconsistent and strategically ineffective.

This is no longer simply an investor relations issue. It is a competitiveness issue.

In increasingly global capital markets, companies that fail to communicate clearly with investors risk weaker valuations, less stable shareholder registers, greater vulnerability to activism and a higher cost of capital. The companies that succeed over the next decade will not necessarily be those disclosing the most information. They will be the ones communicating most effectively.

The gap between disclosure and communication

A persistent problem across UK PLC is the tendency to treat investor communication as a compliance exercise rather than a strategic business function. Publish the annual report, release the RNS, hold the results call — job done.

But reporting to regulators is not the same as communicating with shareholders. And companies that conflate the two increasingly place themselves at a disadvantage.

The FCA itself has recognised this. In developing the new Consumer Composite Investment regime, the regulator explicitly moved away from highly prescriptive disclosure templates in favour of communications that help investors genuinely understand what they own. Its final rules stated that it had “stripped away excessive templating and prescriptive documents, giving firms freedom to innovate and deliver engaging communications to consumers.” The regulator also called on firms to “eradicate jargon and produce simple information.”

That is not simply a consumer protection exercise. It is recognition that existing communication standards are no longer fit for increasingly diverse and retail-heavy capital markets.

For listed companies, the implication is clear. Markets now reward clarity, accessibility and consistency of narrative. Businesses that continue relying solely on dense disclosures and technical reporting risk leaving investors disengaged and unconvinced.

The shareholder register has changed faster than companies have adapted

The composition of UK shareholder registers is shifting materially.

In 2024, retail investors became the largest client group in the UK investment management industry, accounting for 28% of assets under management according to Investment Association data. Retail participation is no longer peripheral to UK equity markets. It is becoming structurally important to liquidity, ownership stability and capital formation.

Yet many listed companies still communicate almost exclusively with institutional audiences. Results presentations, roadshows and capital markets days remain heavily geared toward analysts and professional investors, while retail shareholders often receive little more than highly technical announcements and lengthy annual reports written for regulatory completeness rather than accessibility.

This disconnect increasingly matters commercially.

Retail investors today represent a meaningful source of long-term capital and market support. Companies that fail to engage them effectively risk weakening shareholder loyalty, reducing understanding of strategy and increasing the likelihood of valuation discounts driven by uncertainty or misperception.

The Investment Association has repeatedly argued for “modernising and simplifying communications and disclosure to retail investors,” recognising that the industry’s communication model remains outdated. Its research showing that many UK adults have little understanding of investment products is not simply a public education issue. It reflects a broader market failure to communicate investing in language ordinary people can engage with confidently.

Companies that communicate poorly do not just lose attention. They lose trust, participation and ultimately capital.

The Saba episode exposed a deeper structural problem

The Saba Capital campaigns against UK investment trusts in early 2025 provided one of the clearest recent examples of how fragile shareholder communication infrastructure has become.

Retail investors holding shares through some investment platforms discovered they could not vote easily, had not been informed about meetings or in some cases faced charges to exercise basic shareholder rights.

While the controversy centred on shareholder democracy, it also exposed something broader: many listed companies have become disconnected from significant portions of their own shareholder base.

The Association of Investment Companies responded with its “My share, my vote” campaign, arguing that investors were too often excluded from company communications and voting processes. The subsequent push for reform through the Digitisation Taskforce’s proposed Bill of Shareholder Rights was ultimately about restoring the connection between companies and beneficial owners.

For listed companies, this matters beyond governance optics. Businesses that cannot effectively reach, engage or mobilise shareholders create unnecessary strategic risk for themselves.

Weak communication channels leave companies more exposed during activist situations, shareholder votes and periods of market stress. They reduce management visibility into investor sentiment and weaken confidence in leadership responsiveness.

The lesson from the Saba affair was not merely that retail shareholders were underserved. It was that parts of UK PLC are operating with outdated shareholder engagement infrastructure that no longer matches the realities of modern ownership.

UK companies are still communicating for a different era

Many of the communication practices still common across UK markets were built for a shareholder environment dominated by institutional fund managers and intermediaries. That environment is changing faster than many companies have adapted.

Annual reports continue to grow longer without necessarily becoming clearer. Some listed companies now produce reports running to several hundred pages, despite repeated calls from the Financial Reporting Council for more concise and outcome-focused reporting.

Results presentations often remain highly technical and analyst-focused, with little consideration for how a broader shareholder audience interprets strategy, performance and risk.

Digital engagement also remains inconsistent. While some companies have invested heavily in shareholder accessibility and online engagement, others continue to treat retail communication as secondary. Macfarlanes observed in its 2026 capital markets outlook that listed boards have historically “shied away from engagement with retail shareholders” despite the growing importance of retail participation in public markets.

In competitive global capital markets, this increasingly becomes a strategic weakness.

Investors compare companies internationally, not just domestically. US-listed businesses in particular have historically invested more heavily in investor storytelling, executive visibility and retail engagement. Many American companies understand that communication itself influences valuation, liquidity and investor conviction.

Too many UK companies still treat communication as an obligation to manage rather than a strategic capability to develop.

The valuation consequences are real

Poor investor communication is not a soft reputational issue. It has direct implications for enterprise value.

Companies that communicate clearly and consistently tend to build stronger shareholder understanding, more resilient investor bases and greater confidence around long-term strategy. They are typically better positioned during periods of volatility, less vulnerable to short-term activism and more effective at attracting capital when required.

Conversely, communication gaps create uncertainty. And markets tend to price uncertainty negatively.

Where management teams fail to articulate strategy clearly, investors often fill the gaps themselves — frequently with more cautious assumptions than management would prefer. Weak communication can contribute to persistent valuation discounts, lower investor engagement and reduced analyst conviction.

The UK market’s long-discussed valuation discount relative to US peers has multiple causes, but communication quality is increasingly part of the equation. In a market with hundreds of listed companies competing for investor attention, standing out requires more than regulatory compliance. It requires a coherent and accessible investment narrative.

As Bird & Bird noted in its 2025 guide to investor relations for London-listed companies, competition for investor and analyst attention is intense. Companies that fail to explain their strategy, differentiation and long-term value proposition effectively risk becoming structurally overlooked.

What better communication looks like

The encouraging reality is that the regulatory environment is now moving in the right direction.

The FCA’s new Consumer Composite Investment regime gives firms greater flexibility to modernise how they present information to investors. The regulator has made clear that its goal is to support “more informed retail investor decision-making through clearer, more engaging and comparable information.”

Trade bodies are also pushing for change. The AIC’s advocacy on shareholder voting rights and the Investment Association’s work on simplifying disclosure both reflect growing recognition that communication quality is becoming central to market effectiveness.

But ultimately, the responsibility sits with listed companies themselves.

The businesses that will outperform in the next phase of UK capital markets are likely to be those that treat investor communication as a core strategic function — alongside capital allocation, governance and operational performance.

That means:

- Communicating strategy in language investors can genuinely understand

- Engaging shareholders consistently rather than episodically

- Improving digital accessibility

- Reducing unnecessary complexity

 - Recognising retail investors as an increasingly important constituency rather than a secondary audience

The competitiveness challenge for UK PLC

The next chapter of UK capital markets competitiveness will not be determined by regulation alone. It will depend heavily on whether listed companies modernise how they engage with the people who provide their capital.

UK PLC has world-class businesses, deep pools of domestic savings and regulators actively trying to improve market participation. But companies competing globally for capital, attention and trust cannot rely on outdated communication models.

Investor communication is no longer simply an IR function. It is increasingly a differentiator of corporate quality.

The companies that communicate clearly will attract stronger shareholder support, command greater strategic credibility and compete more effectively for capital. Those that do not risk becoming progressively undervalued in markets where attention, understanding and trust increasingly shape valuation itself.

This article is intended for information purposes only and does not constitute investment advice.