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Financial advice and consumer protection

Abstract : The thesis deals with the consumer protection scheme which aims to prevent mis-selling in investment advice services. It examines the conflicts of interest which appear in the behavior of investment advisors which may ultimately cause mis-selling scandals. The research findings of behavioral economics that the consumer’s rationality can be bounded indicate that financial consumers who are traditionally considered as retail clients or retail investors are indeed vulnerable to the risk of conflicts of interest in investment advisory processes and thus need enhanced consumer protection. MiFID I has recently strengthened its scheme with a view to protecting consumers more effectively from persistent problems of mis-selling. The amendment of the consumer protection regulation is meaningful in that it strengthens the overall consumer protection scheme within the MiFID with a focus on the actual vulnerability of consumers. Furthermore, it contributes to the fostering of the consumer protection system by imposing behavioral duties on financial firms which manage specific conflicts of interest under the important principle of consumer protection. However, even though the intention at the origin of its introduction is widely recognized, it is expected that some difficulties will arise when some of the regulations are virtually introduced and implemented, and thus supplementary measures will have to be established.
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Contributor : Hélène Saint-Gal Connect in order to contact the contributor
Submitted on : Wednesday, April 13, 2022 - 2:51:07 PM
Last modification on : Friday, April 15, 2022 - 3:06:50 PM


  • HAL Id : tel-03640372, version 1



Areum Kim. Financial advice and consumer protection. Political science. Institut d'études politiques de Paris - Sciences Po, 2014. English. ⟨NNT : 2014IEPP0033⟩. ⟨tel-03640372⟩



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