It would not be proportionate to define shares, bonds and derivatives as retail investment products because of adviser costs and a lack of obvious client benefits, the FCA has argued.
In a 50-page discussion paper, Developing our Approach to Implementing MiFid II: Conduct of Business and Organisational Requirements, the watchdog examined how UK implementation of the EU MiFid would work. The directive must be transposed by the FCA by July 2016, and will take effect in the UK on 3 January 2017.
The FCA looked at possible effects in areas including insurance-based investments and structured deposits.
The paper said: “We do not consider it proportionate to include shares, bonds and derivatives in our existing definition of retail investment products. Doing so would risk significantly increasing the market search costs and knowledge needed for independent advisers covering retail investment products, without any obvious consumer benefits.”
Adviser view
Pete Matthew, managing director of Penzance-based Jacksons Wealth Management, said: “It would be ridiculous to bring about more change for the sake of it so I would agree with efforts to not create unnecessary complication.”
