Cost reporting under Mifid II continues to be the most challenging element for advisers when writing suitability reports, according to Pimfa director of regulation Ian Cornwall.
Speaking at the Money Marketing Interactive conference today, Cornwall says charges reporting remains “the most difficult part” of Mifid II due to the lack of standardised templates.
He says: “It is a nightmare. We are still working on [costs reporting], firms are still working on the assumptions as there are different approaches from platforms, and the technology itself so opaque. The absence of a template is being very problematic. Firms want to know they are comparing apples to apples.
“There is very opaque text [in the template] where firms are trying to write details. A wide problem is that we are not looking at the wider customer experience.”
Cornwall says reporting implicit costs, which are the costs of taking an asset into a fund, is “the biggest area” companies are dealing with under Mifid II.
He says: “It is difficult to get the different [market] scenarios, we need a process that everyone is using.”
Aurea Financial Planning managing director Becky Taylor, also speaking at the conference, says having a solid business is what matters when it comes to comply with new regulations.
She said: “We have a little table with costs breakdowns and a graph [in our suitability reports]. Whether clients read it or care, I don’t know. It is obvious what the cost is but if service is good it doesn’t matter what the cost is. It becomes difficult if you were not very explicit in the past.”