The Financial Conduct Authority (FCA) in the UK has opened a consultation on plans to change how investment costs are explained to retail customers.
It issued a parallel warning to firms, emphasising that consumer-facing material should be written in “plain English.”
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The proposed changes would align cost disclosures used by platforms, advisers and wealth managers with earlier reforms covering investment product information.
The aim is to create a more uniform approach so that customers receive information that is easier to follow and more useful.
It focuses on the way firms set out the full range of charges linked to investing, including product charges, distribution costs and advice fees.
The FCA said many consumers do not properly understand what they pay or how those costs affect returns.
It pointed to findings showing that 30% of non-advised platform users said they did not know how much they were charged for investing.
Under the draft rules, distributors would show their own charges together with product costs using an approach consistent with the Consumer Composite Investments (CCI) format when products are sold.
They would also provide regular information on the overall cost of investing.
The proposals also address disclosures where firms charge fees or pay interest on client cash.
According to the FCA, the changes sit within its broader work on the consumer investment market, which it said should be resilient and competitive for both firms and customers.
The regulator also published findings from a review of pre-sale investment disclosure documents ahead of the introduction of the CCI regime from June next year.
The FCA said it would continue working with the industry as the CCI rules are put into effect. Responses to the consultation are due by 21 August.
FCA consumer investments director Lucy Castledine said: “We want more consumers to feel confident investing by getting clearer information in plain English on products and charges.
“The changes will give firms more freedom to innovate and communicate in ways that build trust and support informed decisions to help consumers navigate their financial lives.”
