EU votes to roll out fund cost calculator across Europe

SCM Private’s True and Fair fund cost campaign is claiming another victory in Europe as politicians in the EU’s Economic and Monetary Affairs Committee agreed to bring in a Europe-wide investment cost calculator.

The committee voted yesterday on the proposed introduction of “key information documents” for all investments sold in Europe - an extension of the key investor information documents introduced last year for all Ucits-compliant funds to cover other investments such as structured products.

As part of the vote, committee chairman and UK Liberal Democrat MEP Sharon Bowles tabled a proposal for an investment cost ‘calculator’ to be developed and rolled out across Europe.

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Under the proposals fund managers would be forced to submit charges data for each of their individual products - many of which have multiple share classes - to national regulators every quarter. This data would then be fed into the calculator, which investors can then use to estimate the impact of charges on the performance of their investments.

It comes as the fund management trade body, the IMA, is in the process of implementing its own reporting process aimed allowing investors to calculate the cost of owning a fund unit.

Ms Bowles said: “I remain determined to ensure the highest level of investor protection for European consumers and an online fund calculator would allow investors to check for themselves, and to directly compare, the information which is provided to them by fund managers.”

The True and Fair campaign launched its own fund cost calculator in May - which itself was based on a similar calculator operated by regulators in the US - and campaign founder Gina Miller described the EU vote as “a huge step forwards for greater fund transparency and disclosure”.

“MEPs recognise that it is not enough simply for providers to hand out information in a ‘key information document’, but that they need to put the consumers in the driving seat when making investment decisions by allowing them to directly compare all savings, investment and pensions products across Europe,” Ms Miller said.

Meanwhile, the proposals for the introduction of key information documents across the EU are set to be put before a vote in the European Parliament, before being passed to the European Council.

The committee yesterday decided against making the documents compulsory for retail investors in individual equities and bank deposits.