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The report considers how supervisors and regulated firms across the banking, securities and insurance sectors deal with risks posed by the sale of unsuitable retail financial products.
A key finding is that the notion of suitability is recognised in regulatory requirements across all sectors, but to a varying extent. There are some differences in its application by sector, and probably greater differences by country. The differences that do exist may stem, in part, from the fact that not all supervisors have consumer protection mandates.
The Joint Forum reviewed both the disclosure of information to retail investors and requirements on firms to determine whether recommended investment products are suitable for such investors. The report focuses exclusively on requirements related to retail customers and products with a significant investment component. The Joint Forum evaluated investment-based or investment-linked insurance products, but not those insurance contracts that insure only against risk.