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‘Rewrite wrap rules with a single KFD’

FundsNetwork and Standard Life are calling for a rewrite of the FSA rulebook so advisers using platforms only have to offer clients a single key features document.

They say definitions of packaged products are muddled and many are not relevant in a technology-driven environment.

FundsNetwork marketing director Rob Fisher says the regulator should scrap individual KFDs for products sold through a wrap to cut the admin burden and simplify the process for clients by introducing a single document. He says the FSA should use Mifid to clarify how packaged products rules apply to advisers using platforms and whether they can still be deemed to be giving whole of market advice.

He adds there is confusion over definitions of packaged products with underlying investments, such as unit trusts, deemed packaged products but platforms not.

Fisher says: “The rules were written before the FSA was even aware of platforms and are showing their age. Mifid will be an opportunity to simplify the rules, for instance, having one streamlined key features document for platforms rather than one for Isas and one for investment bonds.”

Standard Life marketing director John Taylor says: “How is an adviser supposed to explain to their client how the various documents, for mutual funds and insurance bonds join up? I think that Mifid brings a great opportunity to harmonise the rulebook.”

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