However, whatever the arguments, professional wealth managers have to grasp an alphabet soup of acronyms of recently passed, or currently debated, laws and directives. To keep pace with all this, here is a list of some of the most important regulations:

UK and rest of Europe

Retail Distribution Review

The RDR, due to be enacted by 2012, is a programme of UK reforms designed to raise the professionalism of independent financial advice and make it more impartial through the removal of commission payments. The RDR is aimed at IFAs. Industry figures have said it will drive up to 15 per cent of IFAs out of the business.

Bank regulation. 

The new UK government - a coalition of Conservatives and Liberal Democrats - have made noises about banking reform, but it is unclear at this stage how far such measures will go, such as whether banks will be forced - as it due to occur in the US (see below) to split off their proprietary trading and derivatives businesses.

Germany

German Chanceller Angela Merkel stunned financial markets in May by proposing draconian, but temporary, curbs on hedge funds, including their practice of “naked short selling” (the practice refers to short selling where the hedge fund has not actually borrowed the security in question). Germany has also temporarily banned naked transactions in credit-default swaps of euro-area government bonds. The measure has been attacked for being easy to circumvent (there are other ways to short-sell an asset) and as a sign of panic by the German authorities over the woes of the euro. The move has drawn raised eyebrows from other countries. The measures are designed to stay until the end of March next year.

European Union

Alternative Investment Fund Managers Directive

This draft EU measure has been approved by the European Council of Ministers at the time of writing. The measure proposes sweeping controls on hedge funds and their activities. Key provisions: new rules for funds located outside the European Union; requirements for greater transparency and greater information to investors about leverage. Alternative investment funds are, under the Directive, defined as “all funds that are at present not harmonised under the UCITS Directive”. The European Union’s alternative investment fund sector held around €2 trillion in assets at the end of 2008.

A key concern is that because about 80 per cent of AIFs are based in London, the restrictions on the ability of EU-based investors to put money in non-EU domiciled funds will drive business out of London. It is also feared the rules will reduce potential returns and choice of fund, and also provoke retaliatory action from the US and Asia. 

The measures are due to be debated for possible enactment in June.

MiFID (Markets in Financial Instruments Directive)

The Directive, now law, is designed, its framers say, to make financial services, such as stock markets, more competitive and also give more protection to consumers. For instance, would-be users of spread-betting accounts must now be assessed by spread-betting firms under an “appropriateness test” so they are considered fit and able to use such products. An important concept with the Directive is the idea of “passporting” – firms covered by the Direcitve will be regulated in their home state and once authorised, they can use a MiFID passport to serve clients throughout the EU, instead of having go through the registration process in each state.

North America

HIRE ACT

Signed into law earlier in 2010 by President Barack Obama, the bill is mainly a package of measures designed to boost jobs, but among its supplementary provisions are measures designed to crack down on tax evaders. The law has the effect of raising compliance costs for firms dealing with US expats and also increases some compliance costs for holders of investments in US securities.

US Senate banking regulation bill (passed in May)

The Bill, if enacted into law and reconciled with other legislation, is slated as being the most radical overhaul of such rules since the 1930s. In short, it proposes to set up a new Consumer Protection Agency to remove abusive practices by credit card companies and mortgage lenders. It will also create a new "Council of Regulators". Regulators will also gain new powers to take over and carry out liquidations of banks where necessary. Banks are also due to lose their proprietary trading activities and hive off their derivative businesses.

The legislation is seen as playing to public distrust of Wall Street, although the nagging question remains of why regulators – which notably failed to act swiftly to avert the previous credit crisis – can be expected to do any better in the future. It is also feared that curbing the size of banks or splitting off some of their activities would not have avoided all, or most of the problems that emerged in the last few years.

Asia

The Monetary Authority Of Singapore

The MAS recently unveiled measures to regulate investments such as hedge funds. At the heart of its concept is the idea of a creating three categories of fund management firms: a “notified” one for smaller funds; and two “licensed” forms which deal with assets above a watermark of S$250 million. One category is for institutional investors, and the other for managers who deal with private individual clients.

International

G20 countries and the OECD

Major industrialised nations have agreed to crack down on so-called tax havens and push for greater openess and transparency by offshore financial jurisdictions. A number of nations – such as Germany, the US, France, Italy and the US – have created tax amnesties to encourage holders of offshore accounts to disclose their assets. These amnesties vary in their perceived success in getting people to own up.

Bank taxes

There are a number of proposals on the table, from the likes of the International Monetary Fund and the European Union, to levy taxes no banks as a way of paying for future bailouts and to curb, if possible, some of the riskier forms of bank activity.