Earlier in the month, the FCA unveiled new rules and guidance focused on improving what information investors get from fund managers, including how they are delivering value for money. There was a further occasional paper released at the same time, called ‘Now you see it’. Though you probably didn’t.
This study looks at how charges are explained to investors and the beneficial use of graphic illustrations to show the impact of charges on investments. It shows that a number of behaviourally-informed graphic treatments can impact investors’ fund choices and, in some cases, their understanding of charges. For one part of the study, all participants in the ‘review screen treatment’ had to view a comparator chart showing the impact of funds’ charges in order to proceed with their decision. At a time when we’re all trying to smooth the client journey as much as possible, adding another step or click to the purchase process may fill many marketers’ hearts with horror. Yet it is clearly the intent of the FCA to drive greater accountability on the part of the fund managers, and ensure greater understanding amongst investors (particularly on fund charges).
We now have improved disclosure of all costs and charges around funds. This latest paper moves the dial further to focus on how this information is presented. It is a further reminder of our responsibility to help consumers make informed choices. Would it be cheeky to suggest that perhaps the FCA could present their findings in a more consumer-friendly format too? Maybe I have an unusually poor attention span, but I can’t help thinking that a large amount of these 30 pages would have made a great infographic video!
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