Dr Matthew Connell, Director of Policy and Public Affair for the PFS, has released the following statement with regards to the Mansion House Reforms announced during the Autumn Statement on Wednesday 22 November.
“We welcome the commitment to replace the EU Packaged Retail and Insurance-based Investment Products (PRIIPs) regime. These regulations dictate how firms should present information to consumers about their investments, and they were poorly researched before they were introduced, which means consumers are not getting the good quality information they need about their investments. The new regime should be thoroughly tested with both consumers and providers to ensure the information provided is clear, fair and not misleading.
“However, there are other opportunities that the Government can take as a result of Brexit. As pension investments become more individualised, consumers will increasingly need advice throughout their lives on investing in a pension and drawing an income from it. The Government can increase access to affordable advice by reforming the system for paying consumer compensation. Currently, this is funded by a mixture of compulsory professional indemnity insurance and FSCS levies. Both these mechanisms impose volatile, unpredictable costs on advice firms, making it difficult for them to grow and provide services to a wide range of consumers. A different system, based on a levy of all funds under management, could provide the same level of compensation for consumers while imposing much more manageable and predicable costs on investment funds.
“It is great news that investors could have more in their investment pots as a result of innovation and better regulation, but without access to advice, many of these achievements will not produce the right outcomes for consumers.”
