Campaign group True and Fair has questioned the FCA’s decision not to require standardised disclosure over costs and charges, despite recommendations from Europe to do so.
In a video from the FCA’s MiFID II Wholesale Firms Conference, which was uploaded onto the FCA’s website at the start of November, Alexander Smith, manager of the disclosure and promotions team at the City regulator, said the FCA did not think a standardised format for advisers and wealth managers to disclose costs and charges would be required.
Standardised disclosure is one of the proposals made in Article 23 of MiFID II, which is set to come into force in 2017.
Article 23 requires the advisers and wealth managers to reveal in one number, in percentage and pounds, the total costs facing consumers over the life of an investment at least once a year or on request.
However, Gina Miller, founder of the True and Fair Campaign, called this a retrograde step. She said: “It has taken more than 20 years to bring in a requirement for genuine cost and fees transparency in the investment industry with new regulation, through MiFID II, just over a year away.
“But the decision that the FCA will not require a standardised format means consumers face being as baffled as they are at present.”
Adviser view
Michael Barrett, consulting director for Edinburgh-based The Lang Cat consultancy, said: “It is clear that the industry needs to be smarter in the way it communicates to its customers. The industry needs to deliver information on charges in a way that investors are likely to understand, rather than seeking to maintain the status quo.”
