PIMFA
20 March 2025
CCI proposals are overly complex, prescriptive and represent a ‘missed opportunity’ for firms and consumers alike
PIMFA, the trade association for wealth management, investment services and the financial advice and planning industry, has warned that the FCA’s new disclosure regime remains overly prescriptive and complex for firms and consumers alike. In its response to the FCA’s consultation paper ‘A new product information framework for Consumer Composite Investments (CCI)’, PIMFA has highlighted that the Regulator’s proposals are incompatible with recent FCA findings on customers with characteristics of vulnerability, and the challenges many clients face when trying to absorb lengthy documents.
In its response, PIMFA has raised concerns that the current proposals will not enable consumers to compare products on a ‘like-for-like’ basis. Despite a level of prescription which runs counter to Consumer Duty principles, the proposals provide flexibility for manufacturers from presentation through to the ability to amend the output of risk scoring. Distributors are afforded the flexibility to create their own product information summary documents, or to amend those created by manufacturers. This subjectivity will make it difficult for direct comparisons to be made.
Whilst the potential for documents to be tailored to consumer cohorts with additional needs is welcome, the implied requirement for distributors to police and take liability for the documents is not.
PIMFA strongly believes that the proposals represent a missed opportunity to take account of industry feedback. PIMFA member firms have expressed frustration that challenges to the current PRIIPs costs and charges disclosure have been ignored, with a similar methodology proposed in the consultation. This will place a disproportionate focus on cost, with the calculation behind the headline figure remaining complex and opaque.
In its response, PIMFA has called for specific focus to be given to:
- Clarity on the interaction between MiFID and the CCI regime. The paper also signposts further consultation papers, but given the close interplay between MiFID and the proposed regime, it is hard to opine fully on the proposals without a full picture;
- The proposed timetable for implementation. The proposed 18-month transitional period will be challenging for firms to comply with and there is an added pressure for UCITs firms where the exemption from PRIIPs expires at the end of 2026. A policy statement would need to be issued by mid-year to ensure they benefit from the full exemption; and
- A clear roadmap to help firms understand the regulators ambition for the wider disclosure framework. This will help firms to plan change activity and also alleviate concerns that a piecemeal approach to reform will result in a disjointed and cumbersome regime.
Responding to the proposals, Julia Sage-Bell, Senior Policy Adviser at PIMFA said:
“Our abiding view of the proposals set out by the Regulator is one of an opportunity missed. When the government confirmed its decision to retire PRIIPS we were excited by the opportunity to reform the overall disclosure framework in line with the FCA’s stated aim to develop a flexible regime that reduced detailed disclosure rules. It is disappointing that what has been proposed is a replacement for the existing PRIIPs regime with little to no consideration given to the broader disclosure requirements. The result is a heavily prescribed, lengthy and complex set of rules which seem to run counter to outcomes focused regulation and do not appear to give much consideration to consumer understanding.
If the FCA decide to progress with these proposals as currently outlined, we would urge them, in particular, to provide clarity to firms on the interaction between MiFID and the CCI regime. We had anticipated that this would have been addressed within the consultation and are concerned that a decision on CCI rules will be taken without full regard to MiFID requirements. In addition, we would urge further consideration to be given to the proposed timeline. An effective disclosure regime is the cornerstone of the retail market framework. The industry needs to be given sufficient time to review and discuss the proposed methodologies and presentation once the MiFID component(s) of the consultation is known.”
[ENDS]
NOTES TO EDITORS
About PIMFA
PIMFA (the the Personal Investment Management & Financial Advice Association) is the trade association for firms that provide wealth management, investment services, and financial advice and planning to everyone from individuals and families to charities, pension funds, trusts and companies.
The sector currently looks after £1.65 trillion in private savings and investments and employs over 63,000 people.
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 help create a UK culture of thriving financial health through constructive advocacy, creating connections and practical support.
PIMFA was created in 2017 as the outcome of a merger between the Association of Professional Financial Advisers (APFA) and the Wealth Management Association (WMA) with a history as a trade association since 1991 – read more.
Further information can be found at pimfa.co.uk
Contact
For further information on this release or other press matters please contact:
Sheena Gillett, PIMFA Communications & PR Director – sheenag@pimfa.co.uk,
+44 (0)20 7011 9869 / +44 (0)7979 493225.
