The evolving risk landscape for retail sales

Piers Reynolds takes a big picture view of the ‘horizon risks’ related to developing and selling retail products.

Piers Reynolds (piers.reynolds@shlegal.com) is an associate who specialises in banking and finance litigation at Stephenson Harwood.

The Coalition government’s reform of the financial services regulatory architecture coincides with developments in the market, and in the regulator’s approach, which together create an unprecedented risk environment for institutions operating in the retail financial services sector. First, investors have suffered widespread losses as a result of investment performance since 2007. Second, recent years have seen a marked increase in the level of activism of retail investors, manifesting itself in the volume of complaints and referrals to the Financial Ombudsman Service (FOS). Third, the FSA’s retail conduct risk policy has shifted significantly towards a more interventionist, aggressive approach.