AIC calls for FCA to put consumers first when reviewing KIDs
AIC Chief Executive, Ian Sayers, comments on the FCA’s call for input on PRIIPs.
Today the FCA published the document, “Call for Input: PRIIPs Regulation – initial experiences with the new requirements”.
Ian Sayers, Chief Executive of the Association of Investment Companies (AIC) said: “We welcome the decision by the FCA to seek evidence on KIDs and will be publishing comprehensive research into their many failings as part of our response.
“The FCA’s review must put consumers at the centre of the process. The FCA seems more interested in defending the regulations than accepting what is obvious to everyone else, that KIDs are confusing and misleading. Arguing that negative transaction costs are not inaccurate epitomises this problem. There may be a technical basis for arguing this, but for a consumer it simply doesn’t make sense. The argument that performance scenarios are not forecasts, but illustrative, is just semantics. If they are not intended to give investors an idea of what they might get back, what is the point of them?
“As our evidence will show, very often what KIDs tell the consumer is dangerously wrong, indicating profits when they would have made losses and vice versa. KIDs are a good example of why it would be better to be roughly right, than precisely wrong, and the FCA needs to acknowledge this before more consumers are misled.”
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Notes
- The Association of Investment Companies (AIC) was founded in 1932 to represent the interests of the investment trust industry – the oldest form of collective investment. Today, the AIC represents a broad range of closed-ended investment companies, incorporating investment trusts and other closed-ended investment companies and VCTs. The AIC’s members believe that the industry is best served if it is united and speaks with one voice. The AIC’s mission statement is to help members add value for shareholders over the longer term. The AIC has 352 members and the industry has total assets of approximately £183 billion.
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