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Investment Association calls for consumer focused approach to reform PRIIPs regulation

Tuesday 2nd October 2018

The Investment Association (IA), the trade body that represents UK asset managers, outlines its solutions to the flaws of the Packaged Retail Insurance-based Investment Products (PRIIPs) regulation, in particular the methodology for calculating transaction costs.

The IA is wholly supportive of the principle behind PRIIPs: to provide savers and investors greater transparency and comparability across funds. However, leading customer voices across Europe agree with the IA that this principle is being compromised by new performance scenarios and cost calculations that are potentially highly misleading.

In its response to the FCA’s Call for Input, the IA calls for urgent action to address the failings in the design of PRIIPs, which also impact the retail funds market and the UK DC pensions market.

The IA recommends the following customer-focused approach in order to provide both full transparency and understandable information across the market:

  1. An open and collaborative approach by EU and UK regulators to work with the asset management industry and other stakeholders to develop the best solutions for savers and investors.
  2. Immediate action by the FCA to suspend and replace flawed calculation methodologies in MiFID II and DC workplace pension scheme disclosure across the UK.
  3. Delay the extension of PRIIPs to the wider European fund universe until a rigorous, evidence-based solution is found.

Chris Cummings, Chief Executive of the Investment Association, said:

“Urgent action is now needed by the FCA to address the flawed methodologies of PRIIPs which are having harmful consequences for savers and investors across the UK retail and DC pensions markets. The FCA rightly called for evidence of investor detriment caused by the new rules. It has been delivered. The case is now proven and it’s time for action.


“We have offered pragmatic solutions to ensure customers are provided cost information that is reliable, clear and meaningful in order to make informed investment decisions because the asset management industry is committed to delivering crystal clear cost transparency. Regulators in the UK and across Europe should now engage in an open dialogue and collaborate with the industry and its customers to develop the best solutions for savers and investors.”

-Ends-

For more information contact:

Anisha Patel, Head of Communications: anisha.patel@theia.org

Helen Ayres, Media Relations Manager: helen.ayres@theia.org

T +44 (0)20 7269 4696

About the Investment Association (IA):

  • The IA champions UK asset management, supporting British savers, investors and businesses. Our 250 members manage £7.7 trillion of assets and employ around 100,000 people across the UK.
  • Our mission is to make investment better. Better for clients, so they achieve their financial goals. Better for companies, so they get the capital they need to grow. And better for the economy, so everyone prospers.
  • Our purpose is to ensure investment managers are in the best possible position to:
o Build people’s resilience to financial adversity
o Help people achieve their financial aspirations
o Enable people to maintain a decent standard of living as they grow older
o Contribute to economic growth through the efficient allocation of capital.
  • The money our members manage is in a wide variety of investment vehicles including authorised investment funds, pension funds and stocks and shares ISAs.
  • The UK is the second largest investment management centre in the world, after the US and manages 35% of all assets managed in Europe.