The Mifid rules on reporting the transaction costs paid by clients are confusing and damaging, according to adviser trade body Pimfa.
Sarah McGuffick, Pimfa's lead regulatory policy adviser, said: “We have made it clear that, if there was to be any hope of Mifid II being applied consistently across the industry, the regulators would need to provide unambiguous and detailed provisions on which firms could base both systems specifications/development.
"This, in turn, could result in the necessary changes to in-house processes and procedures. The fact that this did not happen has resulted not only in firms incurring huge costs in interpreting and applying regulation but also in their diverting resources away from their most important function, namely the day-to-day servicing of their clients’ needs and wishes."
Her comments are part of the trade body’s response to a consultation from the European Securities and Markets Authority on the rules.
The consultation is seeking views from the industry on the effectiveness of the rules, which require investment firms to disclose the costs paid by clients for the transactions made by the fund manager.
The impact of the rules on fund managers was revealed by Judith MacKenzie, a fund manager at Downing, who revealed that confusion over the rules had caused her fund to lose 10 per cent of its assets under management.
ESMA has suggested that some difficulties identified with the current rules can be addressed through further, more detailed rules and mandated presentation formats.
But Pimfa warned that any more detailed rules governing the timing, format and presentation of these disclosures would place further significant costs on firms and would only serve to further confuse consumers.