420 grams of disclosure

Disclosure in the investment industry has become progressively worse as the regulator and providers take part in an uneasy dance, both blaming each other for the increasing bundles of words or unclear commentary which assault investors.

Conducting recent research around value for money, one investor told me, “I’m certainly getting value for money if you think about it in terms of how much paper I get through the post.

The inconvenient truth is that KIIDS are a shockingly expensive waste of time if viewed in light of how many end-users actually read them. Or indeed understand them.

Factsheets are ram-a-jam full of acronyms and jargon. They are like the brown stain on my kitchen ceiling – it’s ugly but it’s been there for so long that I’ve stopped looking at it. Why do they all contain unit prices? Who looks to a factsheet for a unit price? The charges disclosure doesn’t really tell anyone how much the single total cost of investing will be. Just try working out how much you think you might make after reading one. Most fund objectives are so woolly as to be meaningless. They’re inserted with the end goal to minimise prospectus re-writes and are typically there to cover backsides rather than to inform.

We shuffle around fee disclosure but fail to clearly articulate the single "£-fee" that an investor will pay.

Here are some examples. I have nearly 30 test accounts with platforms and robos so I get a small forest delivered every month. I had a bit of excess cash which I wanted to withdraw in one of my test accounts with Willis Owen, so I spoke to a very nice person on their helpdesk who said she’d post me out the forms. Which duly arrived. One page requiring my signature/the actual form, and a massive bundle of Ts and Cs and Lord knows what. I even weighed it because it was so extreme. 420 grams of paper!!!. So I can withdraw about £80. That is the same weight as about 10 pet hamsters!

Let’s look at another example. This letter came from Selftrade 6 weeks ago to explain the new charging structure. Shown here complete with my kids’ spag bol splodge for authenticity. This went on over the page – it’s just too much to follow.

And finally look at this fund’s objective. Would anyone like to hazard a guess as to what this fund might actually do? How would you explain that to a friend down the pub?

I have lots of sympathy and these 3 examples could be most players in the industry so I’m certainly not pointing an isolated finger their way. Investment professionals are not stupid (mostly) and they know that this is broken. I suspect the regulators also know this is broken.


We need personalised illustrations. Fee illustrations in £ terms. Performance shown net of fees. Factsheets which enable someone to understand what the objective of this thing is and what it will cost them. Digital illustrations. Which work on mobile. Bullet points not bullet paragraphs.

Back once again at the door of the debate about whether we want investors to be perfectly wrong or approximately right? How can we break the impasse of everyone knowing it’s broken but continuing to post out forests to keep the regulator off their backs?

We have some ideas. And as with most things we’ve started by asking investors what they want to know, what they understand, and testing whether they do in fact understand what they say they do! We also work with designers from outside the industry to think about how we bring some of these ideas to life.

This image is an example we’ve worked up to show retail investors the concept of drawdowns – maximum losses and gains which is what people fundamentally want to understand. In £s not %s. This quantifies risk better than a number chucked on at the end of a fund name. A digital version can respond to each investor’s relevant amount.

Do get in touch for some details on what we’re up to. We’d love to start to make this better.

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