Regulators ask financial
intermediaries to focus on the needs of investors by overcoming conflict of
interest arising from mismatched incentives
Mumbai: Regulators from different spheres
like PFRDA, RBI, IRDA and SEBI seem to be on the same page in protecting the
needs of investors. They vowed to work in tandem to regulate intermediaries by
overcoming the regulatory boundaries involving various products like pension,
insurance, private equity and mutual funds.
Addressing a gathering of financial
advisors at the launch of ‘Professional Certification Standards for Firms and
Institutions’ by FPSB in Mumbai yesterday, Yogesh Agrawal, Chairman of PFRDA
said “There’s a need for a lead regulator in the financial system, which will
be able to take up all the inter-regulatory disputes under one roof. The
regulatory framework should involve the regulation of investment financial
services by a wide range of entities including independent financial advisors,
banks, distributors, fund managers.”
There was a consensus among various
regulatory heads on overcoming the conflict of interest in selling of financial
products backed by incentives which are not aligned with investor interests.
They stressed on the need for intermediaries to move from product based selling to need based advising by adopting the principles of financial planning.
