Much has changed for the financial services sector in the 10 years since the global financial crisis. Bank balance sheets are beefed up, taxpayer-funded bailouts are less likely and opaque markets are more transparent. But there’s still much to be done, and policy-makers must not let dimming memories of the crisis lead to complacency.

Several steps have been taken to make the financial system safer. But these achievements, such as pushing banks to hold more capital, largely have involved the low-hanging fruit. What’s much trickier is addressing the underlying culture that led to the crisis in the first place. In Canada, for example, regulators still grapple with ways to move the sector toward providing the appropriate products to individual clients.

Canada’s homegrown crisis – the seizing of the non-bank, asset-backed commercial paper market – had far-reaching effects. Thousands of retail investors were unwittingly exposed to that market when financial advisors sold products that they themselves didn’t understand. Regulators have yet to address the culture that allows such a practice.

Moreover, evidence of widespread retail investor abuse – such as the systematic overcharging of retail clients by many of the country’s largest financial services institutions – has continued to emerge since the crisis.

Concerns about conduct in the retail investment business predate the global financial crisis. But, instead of tackling the problem head-on with more rigorous standards, regulators have, so far, tried to address the issue by increasing disclosure requirements. Yet, there’s little proof that disclosure can address adequately the vast power and knowledge imbalance between the financial services sector and the average retail investor.

The Canadian Securities Administrators’ latest effort, the so-called “client-focused reforms,” recognize that disclosure alone is not an adequate answer to conflicts of interest. These proposals would introduce “best interest” requirements to various aspects of the securities rules, along with explicit “know your product” requirements, among other measures.

These changes could address some of the long-standing concerns with the sector’s culture that exploded during the crisis.