Politicians, investor rights groups and asset managers have made an eleventh-hour attempt to convince European officials to amend proposed investment rules over fears they could be “vastly misleading” and a “huge blow to investor protection”.
The new rules which are set to come into force next year and are aimed at making investment products safer for consumers, put an end to the long-held practice of asset managers including information on a fund’s past performance in documents for investors.
There are fears that the forwarding-looking predictions will be misleading and that the absence of any indication of a fund manager’s record will leave investors without vital information.
Guillaume Prache, managing director of BETTER FINANCE, said: “The elimination of past performance disclosure will prevent investors and savers from knowing whether the investment product has made any money or not, if it has ever met its investment objectives [and] if it has under- or over-performed its benchmark.”
He added: “[This] will make it almost impossible to compare and to choose between two similar products.”
If the proposals are introduced in their current format, “it will constitute a huge blow to investor protection in the EU”, he added.
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