Trade bodies Apfa and the Wealth Management Association are lobbying to have adviser information removed from client disclosure documents being brought in under new European rules.
European negotiations on the packaged retail investment products regulation, or Prips, are now entering their final stages. A key proposal of the regulation is the key information document, which aims to make costs and product details clearer for investors.
Prips proposes that advisers include fee information in an ‘annex’ to the KID, which consists of provider product information.
UK advisers are obliged to provide separate information on costs under the RDR.
The WMA is concerned conflicts could arise over whether advisers or providers are liable in the event of firm failures, as the KID and its annex form a single legal document.
WMA deputy chief executive John Barrass says: “If you put the information together in one document there will be disputes over who is responsible for what. This could lead to huge legal bills.”
As Prips is a regulation and not a directive, member states must adopt the measures directly, without national discretion.
But Hannant says the FCA should look at its own rules and adjust them appropriately.
He adds: “The purpose of the KID is to provide product information. Everything else the European Commission is seeking to include from the intermediary the client gets anyway so it is a pointless duplication.
“The other silliness about this is the product comes quite far down the advice process, so there would need to be a conversation about fees before producing a KID document.”
Capital Asset Management chief executive Alan Smith says: “This adds another layer of unnecessary complication and documentation which only serves to confuse consumers.”