Financial firms will have to disclose total investment costs to consumers after the Markets in Financial Instruments Directive II was passed into law.
The EU announced this week that it had made Mifid II part of European law, which included a requirement to report total costs of investments to consumers.
Member states will have to comply by 2016 and the rules cover investment managers, discretionary managers, private client wealth managers, platforms, financial advisers and all other financial intermediaries.
The regulations require the costs to be set out in an understandable format and include all costs that affect investors.
True and Fair Campaign head Gina Miller says: “While the UK’s trade bodies remain determined to produce empty rhetoric and ineffective voluntary codes, the EU has taken the lead and brought in regulation set to end the shameful anti-consumer practices that have prevailed for decades in UK financial services.”
PMI Independent Financial Advisers director John Stewart says: “These kinds of things need to be presented simply and easily for clients to understand.
“I think it is a step in the right direction and should not take too much work for firms to put together.”
Apfa and the Investment Management Association have previously raised concerns that certain aspects of Mifid II are at odds with other European regulations, in particular rules on packaged retail investment products.