AJ Bell chief executive Andy Bell has written to the FCA calling for a “root and branch” review of the complex and lengthy disclosure documents clients receive at the point of sale.
In the letter, sent to FCA director of strategy and competition Christopher Woolard yesterday, Bell argues savers and investors are being deluged with paperwork when they come to taking out a financial product.
He says separate reviews have been carried out into key features illustrations, initial disclosure documents and suitability reports, all with the same aim of helping consumers make better informed financial decisions.
In the letter, Bell says: “Looking at the various elements in isolation is unlikely to result in a good outcome.
“Now is the time for a root and branch review of point of sale disclosure as a whole, with the objective of radically shortening and simplifying the information consumers receive when they are purchasing a financial product.”
He sets out the raft of documents that savers can receive when they engage with financial services firms, including suitability reports, KFIs, key investor information documents, and transfer value analysis reports. Bells says these can often to run over 30 pages.
Bell argues “the FCA should be bold” and challenges the industry to get most of the necessary investor information onto a single page document.
He says: “The overarching aim of this project should be simplification. Ideally we would like to see a reset of the regulatory approach to disclosure so that, rather than adding layers to a broken model, the FCA builds a new framework that savers can really engage with.
“The current disclosure rules were created in a different era and without serious consideration of how they interact with each other. The pension freedoms have redrawn the retirement landscape, and Brexit has the potential to give the UK greater control over setting its own rules in some areas.
“This feels like an ideal catalyst to look at all the information retail investors receive at the point of sale so we can build a system that is fit for purpose today and will help deliver better consumer outcomes.”