The FCA has published a statement on its website concerning firm communications in relation to packaged retail and insurance-based investment products (PRIIPs).

The FCA understands that some firms are concerned that, for a minority of PRIIPs, the ‘performance scenario’ information required in the key information document (KID) may appear too optimistic and has the potential to mislead consumers. The FCA explains that there may be a number of reasons for this: the strong past performance of certain markets, the way the calculations in the PRIIPs Regulatory Technical Standards must be carried out, or calculation errors.

The FCA states:

“Where a PRIIP manufacturer is concerned that performance scenarios in their KID are too optimistic, such that they may mislead investors, we are comfortable with them providing explanatory materials to put the calculation in context and to set out their concerns for investors to consider.

Where firms selling or advising on PRIIPs have concerns that the performance scenarios in a particular KID may mislead their clients, they should consider how to address this, for example by providing additional explanation as part of their communications with clients.”

View FCA statement on communications in relation to PRIIPs, 24 January 2018