Are there ever ‘vulnerable investors’? CCLFR research seminar with Professor Jodi Gardner
Title: Are there Ever ‘Vulnerable Investors?
Abstract
Many jurisdictions around the world draw a line between investors on the basis of financial means – providing higher levels of protection to those with less money to invest. Whilst this initially appears to be justified, recent events have called into question whether this approach is justified and whether higher-income individuals also need additional protection. The increased cost of living, increased life expectancy and frequency of fraudulent investment scams challenge the traditional distinction between ‘sophisticated’ and ‘unsophisticated’ investors. Some jurisdictions have responded to this challenge by increasing the level of means, creating an ‘opt-in’ system or utilising other forms of protection, but they do not appear to be sufficient responses. This paper questions whether a return to the traditional distinction of consumer and investor is a better way to respond and ensure adequate protection for those making important investment decisions about their ongoing retirement and living costs.