PIMFA calls on Government to embrace a generational opportunity to re-energise the UK retail investment market six months on from Edinburgh Reforms

by | Jun 9, 2023

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PIMFA, the trade association for wealth management, investment services and the personal investment and financial advice industry, has called on the Government to embrace a ‘a generational’ to re-energise the UK retail investment market, six months on from the Edinburgh Reforms.

PIMFA welcomes the engagement from the Government and the Regulator in the past six months in seeking the views of the industry with regard to the current regulatory regime and the collective desire to understand what works for the UK financial services industry and what needs reform.

However, while we share the Government’s enthusiasm to reform financial services regulation following the UK’s departure from the European Union (EU), some of the discussion papers and calls for evidence have suggested a desire for wholesale reforms to areas where, member firms have told PIMFA, the case for reform remains unclear. 

As a result, PIMFA is reiterating its call for Government and the Regulator to use a scalpel rather than a sledgehammer in their approach to reshaping financial services regulation in the UK and focus on those areas where genuine improvements can be made. 


One area where PIMFA believes wholesale reform would be beneficial however is the provision of financial information to consumers, which PIMFA argues should be simplified considerably. In fact, PIMFA argues there is a generational opportunity to foster a true culture of saving and investing in the UK by simplifying the disclosure of financial information to consumers. 

There is clear evidence the disclosure regime in the UK hasn’t worked for some considerable time. The previous Packaged Retail and Insurance-based Investment Products (PRIIPs) regime was overly complex and confusing, comparing the characteristics of a vast range of products through a single document that resulted in Key Information Documents (KID) that risked providing misleading information that could lead to consumer harm. Put simply, the complexity of KIDs and the language used within them, had a negative impact on retail investor sentiment, putting investors off buying certain investment products, particularly retail bonds.

PIMFA argues that six reforms to the disclosure regime would have a dramatic effect on the retail investment market and dramatically boost investing and saving in the UK. 


It is therefore calling on the Government and Financial Conduct Authority (FCA) to:

  1. recognise low levels of consumer engagement and financial literacy in the UK and stop using disclosure information as a regulatory tool
  2. focus disclosure information on mass market products such as funds and exclude retail bonds 
  3. take advised businesses out of a future disclosure regime allowing them to rely on suitability letters, which are tailored to their individual client’s needs and circumstances 
  4. develop “headline” disclosures that use straight forward language, are short and focus on the essential information consumers need to know about a product before buying it
  5. launch a broad review of all retail disclosure rules including those under the Markets in Financial Instruments Directive, Insurance Distribution Directive (IDD) and Distance Marketing Directive (DMD) 
  6. create a central retail disclosure sourcebook in the FCA Handbook, making it easier for firms to identify and comply with the rules relating to information provision.  

Simon Harrington, Head of Public Affairs at PIMFA, commented: “We are really encouraged by, and indeed share, the Government’s desire to reform financial services in the UK to make the regulatory regime better suited to how firms work on behalf of their clients.

“But as we have said recently there is a danger that in seeking to make things better the Government and FCA throw the baby out with the bathwater. We would recommend a more surgical approach to financial service reform, particularly given the resources and time already expended by firms to implement certain regulations that on the whole are working well. 


“The provision of financial information to consumers through disclosure documents is the one area where we believe wholesale reform is not only required but presents policymakers with a genuine opportunity to engage more people to save and invest and empower them to take more control of their financial futures. 

“We’d strongly urge the Government and the FCA to engage with us on this issue and as always stand ready work with them to create a the culture of saving and investing we all want to see.”

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