The Financial Services Authority, (FSA) is beginning to take a closer look at the way financial advice is brought to consumers, especially in regards to exchange traded funds, or EFTs. The FSA is concerned with the financial markets in the UK and Australia, and are looking for ways to reduce the potential of conflict of interest situations from arising.
In a recent proposal from the FSA a more interventionist approach to regulating investment advisors to create a better balance between protecting consumers but also allowing consumers freedom to choose their own investment strategies. At the moment the FSA is just putting forth proposals in an effort to open the debate to discussion; however there does seem to be a feeling that consumers would prefer lower cost financial products.
“If regulators in the UK end commissions on sales of investment products, people see that as favoring ETFs, because ETFs don’t carry commissions,” says Loren Fox, senior analyst at Strategic Insight. “It makes it a more level playing field between ETFs and mutual funds.”