PIMFA supports industrycall for PRIIPs review
January 26, 2018

PIMFA, the UK's personal investment management and financial advice association, isjoining with theInvestment Associationin calling for an urgent review of the PRIIPs Regulation.

PIMFA notes that before the Packaged Retail and Insurance-based Investment Products (PRIIPs) regime came into effect on January 1, 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 realized, it says.

Over recentweeks, product manufacturers, wealth managers, financial advisors and industry commentators have drawnattention to instanceswhere the calculation methods mandated by the PRIIPs Regulation result inproductrisk and performance data that is not fit for purpose - information that is anythingbut "clear, fair and not misleading" and that does nothing to help investors compare different products or to make properly informed investment decisions.

PIMFA's Chief Executive OfficerLiz Field, said: "The fundamentalpurpose of the PRIIPs regime is undermined if KIDs fail to provide accurate, timely and clear information to investors.

"In instances whereKIDs provide misleading information - regardless ofproduct providers'compliance with detailedKID content requirements - advisors and distributors should not be expected to "paper over the cracks" by providing"additional explanation" to investors.

"Thead hoc correction of documents that are a matter of regulatory requirement should notbe undertaken lightly - as well ascreating further inconsistencies in the way individual products are presented to investors, such an approachmay result in whollyunreasonableliabilities foradvisors anddistributors."





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PIMFA, the UK's personal investment management and financial advice association, isjoining with theInvestment Associationin calling for an urgent review of the PRIIPs Regulation.

PIMFA notes that before the Packaged Retail and Insurance-based Investment Products (PRIIPs) regime came into effect on January 1, 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 realized, it says.

Over recentweeks, product manufacturers, wealth managers, financial advisors and industry commentators have drawnattention to instanceswhere the calculation methods mandated by the PRIIPs Regulation result inproductrisk and performance data that is not fit for purpose - information that is anythingbut "clear, fair and not misleading" and that does nothing to help investors compare different products or to make properly informed investment decisions.

PIMFA's Chief Executive OfficerLiz Field, said: "The fundamentalpurpose of the PRIIPs regime is undermined if KIDs fail to provide accurate, timely and clear information to investors.

"In instances whereKIDs provide misleading information - regardless ofproduct providers'compliance with detailedKID content requirements - advisors and distributors should not be expected to "paper over the cracks" by providing"additional explanation" to investors.

"Thead hoc correction of documents that are a matter of regulatory requirement should notbe undertaken lightly - as well ascreating further inconsistencies in the way individual products are presented to investors, such an approachmay result in whollyunreasonableliabilities foradvisors anddistributors."



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