PIMFA, the UK's main wealth management and financial advice association, has responded to a very recent 'call for input' from the Financial Conduct Authority about the operation of the European Union's Packaged Retail Investment and Insurance-Based Products regime since its inception in January 2018.

PIMFA agrees with Andrew Bailey’s acknowledgement that PRIIPs implementation “has not gone as we hoped it would” and thinks that the regime is in urgent need of a review.

While the central objective of the PRIIPs regime – to enable consumers to compare the price, risk and performance features of different types of products and make informed investment decisions as a result – has always had support from the bulk of PIMFA's members, there has long been concern about whether product providers’ compliance with the immensely detailed rules that dictated the information that firms must write in KIDs (key information documents) that are set out in the PRIIPS 'regulatory technical standards' (secondary legislation from the EU) is capable of producing disclosures that are clear, comprehensible and useful to investors.

Although the regulation itself requires one of the EU's organs - the European Commission - to perform a 'post-implementation review' by 31st December, PIMFA is concerned by reports that it may defer this exercise. PIMFA is therefore calling on the British regulator, in conjunction with its counterparts in other countries and pan-European "regulators' regulators' such as the European Securities and Markets Authority, who have made public their own concerns about the extent of the regulation's reach, to put pressure on the EU to stick to the original timeframe.

Similarly, there seems to be some doubt as to whether UCITS (Undertakings for Collective Investments in Transferable Securities) and other non-UCITS retail funds currently benefiting from the exemption in article 32 of the PRIIPs regulation will become subject to the PRIIPs regime after 31 December 2019. Given that much of the confusion about the way in which product costs are calculated and/or presented derives from the fact that the different requirements of the PRIIPs and UCITS regimes continue to operate in tandem, PIMFA believes that the PRIIPs regime (although itself in urgent need of considerable improvement) should be extended to UCITS in the timeframe originally specified.

Ian Cornwall, PIMFA's regulatory guru, believes that regulators have been concentrating on the problems facing product providers in producing KIDs, ignoring the questions and worries of distributors, "even though these were the very firms that would be responsible for ensuring the delivery of KIDs to retail investors" in many PRIIP transactions.