Study Of The Sellers’ Obligation Of Information Disclosure To Their Clients When Selling Wealth Management Products

With the development of social economy,people’s demand for financial consumption is also growing,traditional financial product like deposits can no longer meet the requirements of financial consumers.As a result,different kinds of Wealth Management Products(WMPs)are more and more popular.Meanwhile,the number of disputes between sellers and its consumers grows.When the dispute happens,sellers and their clients always argue that whether the obligation of information disclosure to clients has been fulfilled,and different courts also have different views on this question.There are two main reasons for this phenomenon: firstly,the lack of a general description of this obligation in the law results in the lack of clarity on the meaning of information disclosure to clients.Secondly,though the comprehensive standard which combining reasonable person’s and specific consumer’s ability to understand has been raised as the basis for determining whether the obligation is fully fulfilled,it has not provided further guidance on how to apply this standard.Moreover,the comprehensive standard only examines the understandability of the instructions,while the information provided by the sellers includes not only a description of the objective situation,but also conclusions and suggestions based on professional judgment.Therefore,in addition to the comprehensive standard,the sellers should be guided by the principle of best interests to ensure the impartiality of information provision and recommendations,in order to maintain the trust of consumers in the transaction of financial products to the sellers.The full text can be divided into four chapters to reach the above conclusion.The first chapter first clarifies that the object of this paper is the sellers’ obligation of information disclosure in the process of selling WMPs,and secondly,by combing the source and theoretical basis of this obligation and comparing the obligation with similar concepts to determine its connotation.As this paper concerned,the obligation information disclosure to clients refers to the obligation of the sellers’ to provide and explain the information and matters related to the transaction to the consumer in a way that the consumer can understand,or to warn and advise the consumer on certain types of transactions.At the legislative level,our standard for the sellers to fulfill this obligation is still stuck in the information quality requirements,rather than more indepth excavation of how to improve the transparency of the relationship between consumers and sellers.As to practice,the comprehensive standard which combining reasonable person’s and specific consumer’s ability to understand still needs to be further refined.The second chapter lists the factors that influence the sellers’ obligation to disclose.To justify the obligation,the courts should examine the possibility of disclosure,the importance of information and the reasonableness of consumers’ expectations.Providing that WMPs are risky and professional,the sellers should take consumers’ ability to identify the risks,and the degree of trust into consideration to determine their standard of conduct.This paper believes that these factors are of great significance to clarify the boundary of this obligation,and also can provide reference for the refinement of the comprehensive standard.The third chapter mainly focus on interpreting the comprehensive standard which combing a reasonable person’s and specific consumer’s ability to understand,and providing advices on the standard application in trial.Generally,our courts apply a formalization way to use the comprehensive standard.Both objective and subjective standard has its formula,which resulting in the comprehensive standard is substantially objective one and ignoring the consumers information request.Therefore,the courts should pay attention to the characteristic of particular consumer when hearing relevant cases,so that subjective standards can really play a role in easing objective standards,and enhancing the basis for judicial flexibility.The fourth chapter is sublimation in the existing system.With the deepening of the innovation degree of financial products,the content of the sellers’ obligation to disclose to their clients is not only risk warning and explanation of the situation,but also the subjective judgment and conclusion obtained by its use of professional knowledge,which raises the question of fairness.In the Trust Act,the trustee is required to act under the principal of best interests,which guarantees the fairness of advice.However,the relevant provisions of the Trust Act cannot be applied by other sellers.Therefore,this paper suggests that current law should introduce the principle of best interests and strengthen the disclosure of interests in order to improve the quality and transparency of the relationship between sellers and consumers.