Top FCA Findings following the launch of MiFID II

Following the launch of MiFID II, the FCA recently carried out a review of MiFID authorised firms* to gauge how firms are complying with the new rules and what challenges they have faced.

The FCA's top findings

All 50 firms reviewed were aware of the new MiFID II regulations and their responsibilities to disclose all costs and charges to customers. However, the firms in their sample were not interpreting the rules consistently.
The firms that were not complying with the relevant rules often said this was because it was difficult to get all the required data from third-parties.
There was an overall reluctance to implement technology upgrades to support information disclosure to clients as they weren’t confident about the accuracy and delivery of the data.
For all firms reviewed that do not show improvement in disclosing’ costs and charges, the FCA will consider whether further action is required. This could include more detailed investigations into specific firms, individuals or practices.

Are you MiFID compliant?

If you have concerns that you may not be MiFID compliant, the FE Analytics’ Ex-Ante Costs and Charges Calculator can provide you with a clear, transparent view of all the pre-sale (ex-ante) charges that you need to disclose to clients. This includes any costs that can impact their investments be it a bespoke portfolio or a model portfolio all in one place.

How does it work?

The calculator enables you to input all relevant service charges including; one-off adviser fees and platform fees as well as recurring ongoing charges (adviser fees, platform fees, investment management fees), transaction costs, ancillary costs and incidental costs all in one place. You can tailor the data to shows your clients the real value of their investments at the end of your chosen time period of up to 3 growth rates. The tool can also help you to review lump sum investments or investments with regular contributions or a combination of the two.

In addition to the data, the calculator can supply you with interactive visuals to communicate the impact of charges on your clients in a clear and engaging manner. The easy to understand graphics show the total investment, charges, net growth, reduction in yield and more. All reports can be white labelled with your company’s logo and exported to a PDF for your records and supplied to your clients.

*Sample of 50 firms authorised as MiFID investment firms in the retail investments sector

Ref: https://www.fca.org.uk/publications/multi-firm-reviews/mifid-ii-costs-and-charges-disclosures-review-findings