In its consultation response to the International Organisation of Securities Commissions (IOSCO), BETTER FINANCE agrees with IOSCO’s general definition of neo-brokers but suggests expanding it to better reflect key features such as simplified onboarding, fractional trading, and behavioural nudges embedded in user interfaces. The response emphasises that these platforms are not merely digital versions of traditional brokers; instead, they are redefining investment services through low-cost structures, gamification, and complex monetisation strategies.
BETTER FINANCE recommends:
- Broadening the IOSCO definition of neo-brokers to capture emerging features and behavioural impacts.
- Modernising disclosure practices to fit mobile-first platforms, including contextual and layered cost transparency.
- Establishing governance frameworks for white-labelled execution and outsourced services to clarify accountability and liability.
- Introducing safeguards and educational tools to reinforce investor understanding and resilience in a digital environment.
- Developing typologies of digital engagement practices to identify when design elements might equate to advice or inducement.
BETTER FINANCE supports IOSCO’s initiative but urges deeper consideration of neo-brokers’ unique operational architectures, behavioural influences, and associated investor protection risks.