The Association of Investment Companies (AIC) has expressed its frustration at share-dealing platforms restricting the buying of certain investment trusts and said it will lobby against them. 

Last week, AJ Bell confirmed Bluefield Solar Income (BSIF ) and Chrysalis Investments (CHRY ) were among listed funds that failed ‘fair value’ tests which meant DIY investors were prevented from online trading in them, although they could phone through dealing instructions. 

This follows similar moves by rival brokers Hargreaves Lansdown, Fidelity and Interactive Investors who have restricted trading in investment companies on grounds of either value or complexity.

Hargreaves Lansdown, for example, has also stopped investors from buying investment companies such as Digital 9 Infrastructure, Cordiant Digital and Amedeo Air Four Plus until they pass a questionnaire showing they understand ‘complex investments’.

AIC communications director Annabel Brodie-Smith said the restrictions were ‘disappointing’ because platforms did not explain the rationale behind their decisions.

‘It’s hard to see how restricting consumer choice like this could be helpful for consumers,’ Brodie-Smith said. ‘Surely, it’s up to investors to do their own research and then decide which companies they want to invest in.’

Under the Financial Conduct Authority’s consumer duty regulation, share-dealing platforms are required to alert customers at risk of poor returns and help them make informed decisions.

Brodie-Smith said the upcoming statutory instrument to reverse the Markets in Financial Instruments Directive (Mifid) may only provide the FCA with the powers to repeal misleading cost disclosure rules. These have been the subject of a separate campaign against investment companies being required to ‘double-count’ some of their costs.

Aspects of product governance, such as borrowing, liquidity and performance may be the result of rules restricting the use of ‘complex’ investments, although the AIC has always argued that investment companies should not be categorised as such, Brodie-Smith said. 

‘However, we have argued in the past for these rules to be changed and we will most definitely be firmly lobbying on this issue again,’ she said.

Investors are furious at what they see as platforms’ heavy-handed implementation of consumer duty regulation, which they say will let them buy risky AIM-listed companies without warnings, but require them to correctly answer a questionnaire to invest in some closed-end funds.

‘You can buy a piece of absolute dross on AIM but you can’t buy Bluefield Solar with its government-backed stable revenues and healthy income cover? Utter nonsense,’ one commenter wrote.

‘For pity’s sake, buying a solid trust on a discount to NAV is better value, other things equal, because it’s boosting your likely forward return. This is the one that’s important, not the historic return that’s been influenced by gapping out from the net asset value.’ 

A Citywire forum on investment company regulation begun by Tom Poynton of wealth manager Baron & Grant received support. One investor was astonished that nothing had been done to stop the ‘dual harms’ inflicted on the UK and investors from ‘nonsensical and unnecessary Fair Value Assessments’ and the ‘very unfair depiction’ of investment company costs.

‘Why are the FCA and the City minister/Treasury just sitting on their hands and watching the situation worsen by the day?’ the investor wrote. ‘These are not particularly difficult problems to fix and action is needed ASAP.’