PWC warns of ‘risk gap’
Recent events such as the Westpoint collapse are a reminder that the risk chain in the financial services industry is only as strong as its weakest link, according to a study conducted by major accounting firm PricewaterhouseCoopers.
The study, released at the Investment and Financial Services Association conference on the Gold Coast, warned that a widening of the so-called ‘risk gap’ between the investment risks at one end and the understanding of those risks by investors would be detrimental to all links in the chain.
“The industry’s growth and the drive to new innovative products increases the inherent risk of a widening risk gap,” it said.
The study said that an important challenge for industry participants remained in the risks that emerged from such innovative products and growth.
“In particular, are the investment risks well understood by the end investors or by those they trust,” the study asked.
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