Rebuilding trust: Regulation of financial advisers in the UK

• Main Authors: HE, Weiping, LIU, Han-wei
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2021
• Subjects: Banking and Finance Law; European Law
• Online Access: https://ink.library.smu.edu.sg/sol_research/4399; https://ink.library.smu.edu.sg/context/sol_research/article/6357/viewcontent/kmab026__1_.pdf
• Institution: Singapore Management University

Key pointsThe 2006 UK Retail Distribution Review identified much-needed reforms to the retail investment markets. It suffered chronic problems arising from the provision of conflicted advice by financial advisers to their clients. The global financial crisis (GFC) added intense urgency to the need for reforms.As a result, commission-based charging for financial advisers were banned in 2012, and the requirements under the suitability rule were more sharply defined.This article traces the trajectory of the pre- and post-GFC reforms and the ways in which the judicial interpretations of the legislative reforms played an important role in regulating the retail investment markets.The article points to evidence that the reforms improved the quality of financial advice in a practical sense and has helped build consumer confidence in financial advisers. The analysis of this article is confined to the legislative text on the suitability rule and its interpretation by the UK courts.