The Obama Administration’s White Paper on Financial Regulatory Reform (summary here) would require all financial product advertising and other communications to be “balanced in their presentation of benefits, and clear and conspicuous in their identification of costs, penalties, and risks.” The proposed Consumer Financial Protection Agency would define standards for “plain vanilla” financial products and require all financial service providers to offer these products prominently. The White Paper also proposed imposing fiduciary responsibilities on all managers, advisors and salespeople of investment products, and addressing conflicts of interest caused by compensation practices.
The proposals have to overcome resistance from the financial services industry, deal with the overlap with other agencies (notably the SEC), and make their way through the convoluted U.S. legislative process. Still, there is a refreshing new pro-consumer and investor wind blowing from south of the border. FAIR Canada hopes that some of these ideas gain traction in Canada.
