Safeguarding investor outcomes

FINANCIAL industries around the world thrive on an incentives-driven model, sometimes to the detriment of investors. What are countries doing to raise the level of investor protection?

A commission model may be the best way to incentivise a sales force and drive profitability, but it also could encourage the recommendation of products that pay higher commissions rather than doing what's best for the client. Full disclosure of sales commissions helps investors understand potential conflicts of interest, but how do you disclose them in a meaningful way?

In Australia, seventy public enquiries and the Hayne Royal Commission down, still it seems the sales- and commission-driven culture, which has proven to be so frequently inconsistent with good investor outcomes, persists. The financial industry in Australia is highly developed and heavily regulated, and significant expectations exist for the industry to deliver real, tangible value to its customers.