Where once we celebrated some good news on investment trust cost disclosure reform, confusion reigns, not helped by proposals recently published by the FCA on its proposed consumer composite investments regulation, which some interpreted as an intention to reinstate a single aggregated cost figure for trusts, without acknowledging that costs are already reflected in share prices..

On 19 December, the AIC published a response to the release of the FCA’s consultation paper on its proposed regulations. Chief executive Richard Stone said:

“This long-awaited consultation misses the chance for more radical reform. Whilst there are aspects to be welcomed, the FCA’s insistence that underlying fund costs are bundled into a single figure will not help consumers make better decisions as the regulator believes. Instead it would make it near-impossible for consumers to compare costs meaningfully where funds invest in other funds.

“It would also mean a continuation of the market distortion we saw under the old regime – creating disincentives for fund managers to purchase investment companies that offer exposure to renewable energy, infrastructure and other private assets – even when they think they provide good value.

“It’s not clear from the consultation how costs will be disclosed in the distribution chain – for example, by platforms or wealth managers. It’s essential to get this right as well.”

The deadline for responses to the consultation is in March 2025 and implementation of the new rules might not be until the end of the year. The row will drag on for a while yet.

On the plus side, Baroness Sharon Bowles’s Private Member’s Bill passed its third and final reading in the House of Lords on 13 December (you can read her speech here) and now moves to the House of Commons. On 13 November, she questioned the chairman and chief executive of the FCA during the Lord’s Financial Services Regulation Committee about the intransigence of some platforms in applying the temporary rules. You can watch this here.