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‘German-style rules would cut missales’

The German retail financial services model of lighter-touch regulation would lead to less misselling in the UK, according to a leading IFA.

MLP Private Finance chief executive Frank Mesterharm says regulation reduces the buyer’s responsibility and increases the risk for advisers.

Mesterharm, who heads the UK operation of German IFA giant MLP – says if UK buyers buy a financial product and cannot cope with the demands, they automatically accuse advisers of misselling and claim compensation.

He wants to see the UK adopt the German model where customers have a greater awareness of caveat emptor. In Germany, the regulator focuses on providers to ensure products and services meet specific guidelines.

He says there is less expectation of claiming compensation so investors in Continental Europe are more careful about their decisions.

Mesterharm says: “With the FSA promoting compliance led advice, will we see an end of misselling scandals?”•Comment p21

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