Advisers will no longer have to duplicate information on fees in client disclosure documents being brought in under new European rules.
Following last-minute negotiations EU policymakers have agreed a final text on the packaged retail investment products regulation, or Prips, which will be voted through the EU Parliament next week.
As part of a number of significant changes to the text, the regulation has been renamed packaged retail and insurance based investment products, or Priips, to reflect the inclusion of insurance-based products.
A key proposal of the regulation is the key information document, which aims to make costs and product details clearer for investors.
A draft text of the regulation had proposed that advisers include fee information in an ‘annex’ to the KID, which consists of provider product information.
Apfa and the Wealth Management Association had raised concerns this was an unnecessary duplication of information and which could result in conflicts over whether advisers or providers are liable in the event of firm failures.
The final text removes the requirement to include adviser cost information in the KID. Instead, the KID must include a “clear indication” that advisers will provide cost information separately.
The WMA says the final text includes a number of other “wins” for advisers, including the removal of a previous requirement for the customer to sign and return a copy of the KID before a product could be purchased.
WMA chief executive Tim May says: “We campaigned long and hard to explain the contradictions between the draft Priips legislation and the UK’s investing culture, and have won some significant victories along the way.”
The regulation will come into force in summer 2016.
For a full analysis of the final Priips text and what it means for advisers, read this week’s new look Money Marketing