Setting up an appropriate level of protection for retail investors involves finding a difficult balance between freedom of choice, individual responsibility and protection against detrimental products and practices.
Mis-selling cases are incredibly costly for all stakeholders, they lead to redress and reputational costs for the industry, are a drain on regulators resources and have a detrimental impact on investor confidence.
Product failure can be linked to excessive complexity or an excessive level of risk, but also to product features taking advantage of investors’ behavioural biases, excessive costs or products not meeting the needs of investors, all features that can be found both in structured and non-structured products.
