View more on these topics

Letters sent to FCA from boards of Baillie Gifford trusts over misleading KIDs

Several independent boards of Baillie Gifford’s investment trust clients have written to the FCA about concerns with new Priips key information document rules.

Baillie Gifford’s concerns relate to disclosure rules for the documents. It says these are based on past performance and could lead to investors being misled.

Baillie Gifford compliance and legal partner Graham Laybourn says: “Such is the concern of this new KID disclosure, we have seen the independent boards of a number of our investment trust clients writing directly to the FCA.”

He adds: “We fully support the views expressed by our investment trust directors that these mandated performance scenarios have the potential to set unreasonable expectations when being read by our retail investors.”

Earlier this month, analyst Numis Securities also raised concerns that the KID could be misleading for investors.

Numis said advisers must use common sense when selecting investment trusts through the new Priips’ Key Information Document as it could be misleading for investors.

Baillie Gifford investment trust manager James Anderson says the business is “disturbed” by the requirements of the KID.

Anderson, who manages the Scottish Mortgage investment trust, says: “We do not believe that reliance on past performance data is ever a sufficient guide to the many possible future outcomes in stocks and markets.”

Recommended

Business-Document-Technology-Growth-700x450.jpg

Warning over misleading Priips document for investment trusts

Advisers must use common sense when selecting investment trusts through the new Priips’ Key Information Document as it could be misleading for investors. That is the view of analyst Numis Securities, which has published a report about the KID and investment trusts. Priips, which will apply to a wide range of firms including banks, insurers, […]

EU Flags European Union 480

FCA offers more flexibility over Priips reporting

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 […]

EU policymakers blamed for Priips delay

The Association for Investment Companies has attacked the ineffectiveness of EU policymakers on fund regulations such as Priips, urging the UK Government to set its own rules once out of the European Union. The trade body says there are “potential benefits” for the UK to be solely in charge of its own rules around funds. […]

4

Which financial services names have made the Rich List?

Peter Hargreaves has jumped to 42nd position on the Sunday Times Rich List, a climb of nine places from last year, after seeing his wealth grow £849m to £3.2bn. Hargreaves is no longer on the Hargreaves Lansdown board but has kept a 32.2 per cent stake in the company – the value of which has […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. I must admit I do find this requirement ironic given the “past performance is not a guide to future performance” warning that’s been present for multiple decades now.

  2. I am sure that this will not be the last letter the FCA receive John Kay in this weekend FT outlined the same concern
    But the bureaucrats in Brussels know best and would not take the slightest notice of a investment trust or the experience of it’s management that was established in 1909

  3. Richard Lovegrove 22nd January 2018 at 5:45 pm

    The KIIDs do not in reality offer the best advice to retail clients on investments such as Scottish Mortgage. It highlights the complete lack of understanding by the Regulators

Leave a comment