PIMFA supports industry call for PRIIPs review
26th January 2018
PIMFA, the UK’s leading personal investment management and financial advice association joins with the Investment Association in calling for an urgent review of the PRIIPs Regulation.
Before the Packaged Retail and Insurance-based Investment Products (PRIIPs) regime came into effect on 1st January 2018, the financial services industry expressed concern that potential flaws in the design of Key Information Documents (KIDs) could result in investors receiving misleading information ahead of transactions. Those concerns have now been realised.
Over recent weeks, product manufacturers, wealth managers, financial advisers and industry commentators have drawn attention to instances where the calculation methods mandated by the PRIIPs Regulation result in product risk and performance data that is not fit for purpose – information that is anything but “clear, fair and not misleading” and that does nothing to help investors compare different products or to make properly informed investment decisions.
Consequently, PIMFA joins with the Investment Association in calling for an urgent review of the PRIIPs Regulation. In addition, PIMFA calls on the Financial Conduct Authority to provide further clarification of its recent suggestion that firms selling or advising on PRIIPs should address potentially misleading information in KIDs “by providing additional explanation as part of their communications with clients”.
PIMFA’s CEO, Liz Field, said:
“The fundamental purpose of the PRIIPs regime is undermined if KIDs fail to provide accurate, timely and clear information to investors.
In instances where KIDs provide misleading information – regardless of product providers’ compliance with detailed KID content requirements – advisers and distributors should not be expected to “paper over the cracks” by providing “additional explanation” to investors.
The ad hoc correction of documents that are a matter of regulatory requirement should not be undertaken lightly – as well as creating further inconsistencies in the way individual products are presented to investors, such an approach may result in wholly unreasonable liabilities for advisers and distributors.”
Notes for Editors
About PIMFA – the Personal Investment Management & Financial Advice Association
- PIMFA is the UK’s leading trade association for firms that provide investment management and financial advice to everyone from individuals and families to charities, pension funds, trusts and companies.
- PIMFA represents both full and associate member firms.
Full members provide a range of financial solutions including financial advice, portfolio management, as well as investment and execution services. They assist everyone from individuals and families, to charities and pension funds, all the way to trusts and companies.
Associate members provide professional services to the PIMFA community.
- PIMFA leads the debate on policy and regulatory recommendations to ensure that the UK remains a global centre of excellence in the wealth management, investment advice and financial planning arena. Our mission is to create an optimal operating environment so that its member firms can focus on delivering the best service to clients, providing responsible stewardship for their long-term savings and investments.
- PIMFA was created in June 2017 as the outcome of the merger between the Association of Professional Financial Advisers (APFA) and Wealth Management Association (WMA) – read more.
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