FCA asks firms to be clear on costs and charges

The Financial Conduct Authority (FCA) has today published the key findings of supervisory work to assess the effectiveness of disclosure by asset managers and intermediaries, such as wealth managers, to their retail customers. This work was prompted by new disclosure requirements on costs and charges introduced by MiFID II and The Package Retail and Insurance-based Investment Products (PRIIPs), which came into effect in January 2018.

The FCA has also published the findings of the Call for Input which sought views on the initial experiences of the requirements introduced by PRIIPs including transaction cost reporting and the scope of PRIIPs. Andrew Bailey, Chief Executive of the FCA said: “Certain aspects surrounding compliance with PRIIPs may risk not leading to good consumer outcomes and we are working with EU institutions to address these.”

The FCA will continue to work with firms to increase understanding of the PRIIPs legislation but will take further action if firms do not improve. The FCA will also consider whether further guidance is required in order to address concerns about conflicting requirements and lack of clarity about the scope of application of PRIIPS requirements.

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