These days, UK-based
stockbrokers are authorized and regulated by the
Financial Services Authority (FSA). There is substantial
emphasis on consumer protection.
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One of the key requirements of stockbrokers and
other financial services firms is to treat customers
fairly – and to show the regulator they
are doing it. In general, remuneration should
be linked not entirely to volume of trading but
also to quality. Products may be expensive but
the pricing should be fully transparent. Exclusions
in the contract should be mentioned and not just
buried in the small print.
Under the UK principles-based regulatory regime,
firms must often make key decisions but the FSA
holds senior management ultimately responsible
for any wrongdoing. It may take enforcement action
against all individuals it considers responsible
as well as the firm. The industry is very jumpy
about this and is likely to address complaints
properly. Every stockbroker is required to have
a written complaints procedure in place, and you
have grounds for complaint if the firm has failed
to deal with a complaint competently or honestly.
