Your KID's First-Term Report

Debate has raged all year across the European financial services community about the PRIIPs (Packaged Retail Investment and Insurance-linked Products) regulation. Since January, investors must recieve a 3-page Key Information Document (KID) before they can invest in these products. The information presented about risk, return and cost is rigidly defined, but its value to investors is heavily questioned. A new Morningstar Policy Research paper unemotively examines the requirements of the three component sections and makes focused recommendations on how they could be improved.


Key Takeaways:
  • The research is based on perhaps the most comprehensive set of data yet analysed, covering over 50,000 classes of products
  • Much of the expanded disclosure requirements are good, but the value of underlying information is lost through over-simplification
  • Replacing past performance with future performance scenarios, based upon past performance, is unhelpful, confusing and potentially misleading
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