Just before the midnight deadline yesterday, the industry group campaigning for accurate cost disclosure for investment companies submitted its joint response to the Financial Conduct Authority’s (FCA) Consultation Paper CP 24/30 on the new Consumer Collective Instruments (CCI) regime.

Reflecting the importance of this Consultation, the impact it could have on the investment trust sector and the depth of feeling among both investors and intermediaries surrounding the proposed changes, the response attracted more than 450 co-signatories.

Watch Gravis’s William MacLeod explaining why the consultation is so important for the investment trust industry here.

The list of 458 co-signatories ran over 8 pages and included:

• 36 parliamentarians/peers

• 3 research and representative organisations

• 9 legal and capital markets experts across investments, pensions, financial regulation and law

• 69 corporates including listed investment companies, investment management firms, investment banks and law firms

• 279 senior capital markets professionals including Non-Executive Directors of listed investment companies, fund managers, legal advisers and capital market practitioners

• 62 capital markets professionals and investors signing in a personal/private capacity

• More than 50 of these named signatories were also current chairs of listed investment companies

Gravis’s William MacLeod commented: “The response has been overwhelming from investors, intermediaries, Parliamentarians and from those who are not connected with the sector but who recognise the inconsistencies of the proposals in the CCI consultation. This is a consultation, and we have been asked for our views. I sincerely hope that the process of consultation is followed in the spirit is which it is presented, such that we’ve been asked to comment and have responded in huge numbers. The proposals don’t work, and we’d like to explore other options. Options, I should add, which are intended to give investors more useful and actionable information.

“55 pages of impact statements have been submitted to the FCA and the written submissions have been published on the www.costdisclosure.co.uk website, which we have shared with the FCA. The statements have been kept confidential but include comments such as ‘…the consequences of this have been disastrous…’, ‘misleading cost disclosure has been a costly misstep, driving money out of UK…’ and I am utterly speechless when it comes to the absurdity of excluding passive funds from the CCI’.

“Perhaps most importantly though, this statement from a retail investor: ‘I have been an investor in investment trusts for years and, by and large, they have been a successful investment for me. Then a few years ago I looked at my statement from my adviser and everything changed. Having shown me that there was no cost for owning my shares, the statement started to show costs and neither I nor my financial adviser were able to explain. For example, how I was being charged, where was the money coming from and he told me that he was obliged to add these costs even though I’m not being charged. To be clear, nothing was taken from my holdings or my account, and yet these charges kept appearing. I was encouraged to look at something called a KID, but I didn’t understand it; it was far too complicated and didn’t explain what was happening. I learnt that you [the campaign group] are interested in the viewpoint from an investor and have one plea: Please can it go back to how it was. It was simple to understand and when I looked at my statement, it showed me what I am being charged rather than a figure which makes little sense.’”

“We must wait for the outcome of the consultation,” continued MacLeod. “Our hope is that the FCA will engage and work together with the sector to reach a framework which works for all. It would be a shame and cause confusion if we were to undo all the progress that was made with HM Treasury’s Statutory Instrument in November last year.”