QUESTION FOR IFAs
Can a firm rely on the Provider Disclosure of charges when it comes to SR reports for investment advice and reviews?
Yes, a firm can rely on the Provider disclosure where all costs and charges are disclosed on the Key Information Document/Illustration and the amounts are aggregated
MiFID II AND IDD COSTS AND CHARGES DISCLOSURE PAPER
Problems in the file check department have been reported. This arises where a firm relies on the Provider Disclosure of the half a per cent plus-plus, but while all costs and charges are disclosed on the Key Information Document/Illustration in a fashion, they are NOT AGGREGATED.
You must aggregate the costs and charges, both in per cent terms, and in number terms, as per the table below, and this must be done AT LEAST ANNUALLY.
On our reviews with advisers it is quite clear that this is not happening as it should. Many times this is the providerâ€™s fault, because they too have this obligation. But if they donâ€™t do it, you the adviser is almost certain to be the one held liable, not them â€“ your file will fail.
You should follow the table below.
So the answer is yes you can rely, but you should - best practice - also replicate this disclosure of costs and charges in the Suitability Report. A firm should check provider information to ensure these requirements are met and signpost to these in the Suitability Report.
This is one of the key changes that was introduced by MiFID II and IDD - namely the requirement to provide clients with aggregated information on costs and charges.
Click here to download (MEMBERS ONLY)
â€œA Guide to providing clients with initial and ongoing costs and charges informationâ€
Available as usual in the BAT document library under search term "MIFID"