FCA calls for costs and charges disclosure improvements

FCA has issued a set of papers on costs and charges disclosures.

  • its feedback statement on firms’ experiences of the PRIIPs requirements concludes that firms find certain issues, in particular relating to summary risk indicators and performance scenarios, hard to deal with, and that some KIDs display transaction costs that are unlikely to be a true reflection of the actual cost. FCA shares many of the firms’ concerns and will work with the Commission and ESAs to ensure there is a full review of the requirements. But in other areas it thinks the requirements are reasonable and will be encouraging firms to work harder to address concerns about conflicting requirements and lack of clarity over their application;
  • its review of costs and charges disclosure in the asset management sector calls on firms to make sure all their disclosures are consistent and clear.  While most firms calculate transaction costs properly, some do not and others do not disclose them prominently or in an understandable manner.
  • its review of costs and charges disclosure under MiFID 2 focussed on retail intermediaries.  FCA found overall good understanding of requirements, and examples of good practice, but again calls on firms to work together to ensure rules were interpreted consistently. so that customers can make better like-for-like comparisons
  • its consultation on publishing and disclosing costs and charges to workplace pension scheme members proposes a requirement on pension scheme governance bodies to disclose costs and charges to scheme members.

Emma Radmore