The Financial Services Authority (FSA) is battling the European Commission over plans to force product providers to include information about adviser charging on key information documents (KIDs).
The UK regulator is fighting the proposal on the grounds that it links advice with a product in a way that runs counter to the spirit of the retail distribution review (RDR), according to Matt Connell (pictured), Zurich principal for government and industry affairs.
In December the commission’s latest draft regulation on packaged retail investment products proposed that KIDs should include the cost of advice as well as the product details they already carried. The FSA went to Brussels to give evidence in January.
‘The spirit of the RDR is very much about splitting advice from the product,’ said Connell. ‘Putting information about adviser remuneration in a document that’s about a product the customer is getting sends a difficult message to consumers.’
He added: ‘You have advisers giving information about their services at different times [of the advice process], so putting everything together into one document doesn’t make sense from the customer’s point of view.’