Steven Cameron, Pensions Director at Aegon, comments: ‘We very much support the principles and aims underpinning the FCA’s proposals for Consumer Composite Investment (CCI) product summaries. Product information must be engaging and as simple as possible to help the broad consumer target market make timely, well-informed and effective investment decisions. The CCI product summaries replace and improve on PRIIP disclosures, which failed miserably on these grounds – but we’d like the FCA to be much bolder.
“The latest proposals still require extensive detail, failing the ‘as simple as possible’ test, which will hamper engagement. With 12.6 million UK investors with ‘varying levels of financial sophistication’ holding a CCI, keeping things truly simple couldn’t be more important. Prominence should be given to the three ‘core’ components of performance, risk and charges. But within each of these, layering could then be used to offer consumers access to supporting and contextual information. In this vein, we strongly welcome the emphasis on digital communications, which enable ‘click throughs’ to meet the different information needs of different customer groups.
“As an example, we wouldn’t class transaction costs as truly core here. These are both very difficult for customers to understand, and arguably less of a cost and more a means to drive improved performance. We agree they should be made available, but as an option for more sophisticated investors to access.
“Before finalising the rules, we’d recommend the FCA works with industry to create mock-ups for a variety of products to test with customers on their understandability and the relevance of different levels of detail. Unfortunately, the new CCI product summaries will remain very different from pension product disclosures. As most investors in CCIs will also have a pension, moving to full consistency across the two could be beneficial to consumer understanding. However, it would be a massive undertaking at a time of a particularly busy regulatory change agenda.”
|
