In a white paper on MiFID II and PRIIPs rules, FE Limited, a UK-based investment ratings and research agency, warned about the difficulties advisers will face when providing clients with personalised data about their funds (costs, purchases and sales of funds). Three difficulties stand out:
First of all it looks as though some fund firms will not be ready, even though the implementation date was postponed to the 3rd of January 2018.
Secondly, FE underlines that the requirement to provide clients with “post-sale” data (fund costs and charges) would be problematic “the post-sale reports will cause most problems, because they are client-specific and it’s not simply a case of taking generic fund data and passing on”. Those data will be used to calculate an individual’s costs and charges.
Thirdly, regarding the need to inform clients in the event that a portfolio drops 10% by the end of the business day, FE stresses that this short time frame could be problematic: “The ad hoc report…is less problematic in terms of the data, as advisers should be able to produce a valuation easily, but may be troublesome in respect of the monitoring required and the need to report to clients by the end of the business day”.
FE underlines that the burden of collecting data should be minimize for fund firms and should be left to specialists.
Read the FT Adviser article here