Book contents
- Frontmatter
- Contents
- Preface and acknowledgments
- Table of cases
- Table of treaties and legislation
- List of abbreviations
- 1 The retail investor and the EC
- 2 Designing a retail investor protection regime
- 3 Product regulation
- 4 Investment advice and product distribution
- 5 Disclosure
- 6 The trading process
- 7 Education and governance
- 8 Supervision, enforcement and redress
- Index
- References
7 - Education and governance
Published online by Cambridge University Press: 26 February 2010
Book contents
- Frontmatter
- Contents
- Preface and acknowledgments
- Table of cases
- Table of treaties and legislation
- List of abbreviations
- 1 The retail investor and the EC
- 2 Designing a retail investor protection regime
- 3 Product regulation
- 4 Investment advice and product distribution
- 5 Disclosure
- 6 The trading process
- 7 Education and governance
- 8 Supervision, enforcement and redress
- Index
- References
Summary
Investor education
Investor education
The benefits
Demand-side strategies for the retail market have traditionally taken the form of disclosure requirements which, until recently, have paid little attention to retail investor vulnerabilities and have had little traction ‘in action’. But one of the most striking developments in recent retail market policy in the UK, the EC and internationally concerns the proliferation of regulator-driven investor education/general financial capability campaigns (often reflecting specific education mandates) and government-sponsored general financial capability strategies. This marked trend is well illustrated by the OECD's 2005 financial education principles and by the inclusion by the Joint Forum of investor education in its 2008 substitute products discussion. The investor education agenda has also been embraced by IOSCO. Industry investor education principles are also burgeoning. This movement is closely associated with the fast-emerging evidence of poor financial literacy and flawed decision-making and with the policy recognition of the need to embrace more innovative investor-facing strategies if investors are to be effectively protected; but it is also closely related to the policy priority to encourage stronger long-term market-based savings.
The need for investor education to form part of any retail market strategy with serious ambitions to deliver stronger market engagement, competent investor decision-making and more effective rules ‘in action’ is a recurring theme of the scholarly debate.
- Type
- Chapter
- Information
- How to Protect InvestorsLessons from the EC and the UK, pp. 374 - 425Publisher: Cambridge University PressPrint publication year: 2010
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