AIC responds to the FCA’s FAMR and RDR review

 “Important questions unanswered”.


Today the Association of Investment Companies (AIC) issued a response to the FCA’s Evaluation of the impact of the Retail Distribution Review and the Financial Advice Market Review.

The review evaluates the impact of the Retail Distribution Review (RDR), whose rules mostly took effect at the end of 2012, and the Financial Advice Market Review (FAMR), which was launched in 2015 and reported its recommendations in 2016. It concludes that “on the whole, the financial advice market is improving, albeit slowly”.

Ian Sayers, Chief Executive of the Association of Investment Companies (AIC), said: “Improving access to financial advice for all consumers is an important goal, which we strongly support. However, the FCA’s evaluation of the impact of RDR leaves important questions unanswered.

“Despite RDR’s ban on financial advisers taking commission from investment products, which created a structural bias towards open-ended funds, it remains the case that the majority of advisers do not use or consider investment companies.

“To promote the best outcomes for consumers and stimulate effective competition in the market, it’s important that advisers consider a full range of products, including investment companies where appropriate. For example, many advisers recommended daily-dealing open-ended property funds to their clients, even though that structure is now widely recognised as being unfit for purpose. Had advisers made greater use of closed-ended options, such problems could have been mitigated or avoided.”


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Notes to editors

  1. 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 358 members and the industry has total assets of approximately £209 billion.
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