The International Organization of Securities Commissions (IOSCO) is flagging misconduct in the retail investment business as one of the key threats to global financial markets in the year ahead in its latest market risk outlook.

The report, which was published on Tuesday, looks at possible threats to the global financial system, markets and investors. Among the key risks highlighted is the threat misconduct in the retail investment industry poses.

Harmful conduct in retail markets can include investment fraud, negligence and mis-selling, the report notes. In particular, it points to the mis-selling of complex, structured retail products as a potential threat.

“These products are inherently complex and many investors and advisors fail to understand them sufficiently,” the IOSCO report says. “High commissions on these sales also can drive investment advisors to push these products, to the detriment of some investor classes.”

Indeed, the report suggests that complexity in retail investment products and services could be considered an area for further investigation by regulators. It also specifically highlights products that combine investment funds with life insurance policies as a concern due to their complexity and incentive structures.

Although regulators have tried to mitigate the risks associated with product complexity and the risk of mis-selling, the report suggests that they should “continue to monitor the suitability of these products and advice provided in relation to these products by intermediaries, and, by doing so, prevent harm to investors.”

Some of the other key risks flagged in the report include concerns about corporate bond market liquidity, cyber threats and the growing importance of collateral in financial markets, which may transfer risk in ways that create new, undetected vulnerabilities.

The IOSCO report says that the risks highlighted in last year’s report — which include the governance and culture of financial firms, the search for yield, capital flows to emerging markets and central clearing — remain on the group’s long list of risks that it continues to monitor and address in its policy work.