Eight global fund houses - including Fidelity, BlackRock and Schroders - have called on the European Commission to dump draft rules which aim to boost consumer protection.
According to FTAdviser’s parent publication the Financial Times, the asset management firms have written to the European commissioner Jonathan Hill to complain about the proposed Priips rules.
In the letter, executives argued the rules are “not evidenced based, will not help consumers, and will not command respect”, adding they are in danger of leaving retail investors without the “high-quality information they deserve”.
Senior figures from Allianz Global Investors, Axa Investment Managers, Nordea Asset Management, Fidelity International, Robeco, JPMorgan Asset Management, BlackRock and Schroders have all signed the letter.
However, one member of the European Parliament, Sven Giegold, warned the proposed changes would “mislead ordinary investors”, describing the demands as “questionable”.
The rules form part of the regulation that looks to encourage efficiency across Europe by helping investors compare the key features, risks, rewards and costs of packaged retail and insurance-based investment products (Priips).
Under the new legislation, asset managers will no longer issue key documents which include information on a fund’s past performance, and must instead provide information on how products are likely to perform in the future.
But the executives have urged the European Commission to allow both past performance and the future forecast of the fund to be included alongside each other, because the past provides “historic proof” of a fund manager’s ability to outperform the benchmark.
They also asked for the methodology for calculating and disclosing transaction costs to be amended.
The Priips rules, which are due to be introduced at the end of this year, would be delayed if the legislation is altered.
In January, the Financial Conduct Authority warned providers and advisers to prepare for Priips, stating: “It is important that all firms who manufacture, sell or advise on Priips understand what the changes mean for them before the implementation date of 31 December 2016.
“Manufacturers must prepare a Key Information Document and publish it on their website.”
Dan Farrow, director of SBN Wealth Management, said he agreed with the fund houses.
“To just make predictions of future performance based on ‘what’, without substantiating that these views have made or lost money in the past is ludicrous.
“It shows a blatant ignorance and goes against the consumer protection principle.”