Firms advising on or selling Priips products will be allowed to choose whether or not they include personal performance projections alongside Key Information Documents, the FCA has said.
In a consultation paper published on Friday, the FCA finalised its approach to performance projections under Priips rules, following its recent update on disclosure rules for the upcoming regulation.
The regulator notes that some clients might still want to receive personalised performance data for example when they have “specific investment objectives”.
This could work for clients with non-standardised investments or in cases where performance scenarios in the KID are of “limited relevance” for the client’s needs, the FCA says.
The decision to give firms a choice on extra performance reporting builds on a previous consultation where the FCA proposed removing any obligatory requirements.
In the latest consultation, which runs until 2 October, the FCA welcomes views on any additional performance scenarios that could go alongside the KID.
Despite not expecting firms to provide more scenarios, the FCA expect firms to clarify to clients how personal projections differ from the performance scenarios in the KID.
It adds: “We would also expect firms to make it clear the personal projections are not better or more accurate than the standardised performance scenarios in the KID, which would always need to be provided.”
To maintain consistency with the KID, the FCA suggests, but doesn’t recommend, firms to use the same methodologies as the Priips technical standard.
Priips, which is going to be implemented in January 2018, will apply to a wide range of firms, including investment managers, banks and insurers, and aims to extend Mifid II standards on consumer protection to insurance-based investment products.