In Australia, regulation has ‘upped the ante’ on vertical integration – ‘You must not advise, refer or act in any other manner where you have a conflict of interest or duty’
If you are interested, take a look here
The question is this. Why? Why has regulation in Australia focused on conflicts of interest? It’s because it’s a problem. But does that mean it’s only a problem in Australia? No, it doesn’t. It just means regulation doesn’t have the power or guts to make big changes yet in the UK. Instead, it is up to the consumer to make informed decisions about how they invest. The reason for the change in Australia is to clean up their industry.
In the UK there are many vertically integrated firms that are good at persuading consumers to buy when conflicts of interest clearly exist. Is it wrong? Not from a current regulation perspective, but is it wrong morally?
If you take more interest in how your money is invested, you are better equipped to understand the conflicts of interest; and in doing so, your outcomes will change for the better. At present, it’s up to you to seek change. You can’t rely on regulation. Well, maybe not yet…
The Wealth Coach, an independent financial advisory firm based in the UK. Nic Round, Chartered Wealth Manager.
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