Fund groups are not doing enough to deliver their Key Investor Information Documents (KIIDs) in plain, jargon-free language, as they are required to do, according to investment advisers.
In a survey of 110 advisers at the end of 2013 by KIID specialist Kii Hub, 67 per cent said that most or all KIIDs continue to use jargon, although the majority of respondents agree that they are generally clearer and more concise than other fund documents.
Since July 2012, the asset management industry has been required to offer KIIDs to investors in every share class of every UCITS fund in Europe, ensuring that “the language is clear, succinct and comprehensible,” and “the use of jargon is avoided”. However, many groups are failing to achieve this, with only one in three advisers saying that KIIDs feature plain language that makes them easier to understand than the Simplified Prospectuses they replaced.
The Kii Hub service is provided by Global Funds Registration, a joint venture between data and document production experts FE and Technical Fund Marketing, which specialises in regulatory and product advice to fund groups.
Ian Overgage, director of technical fund marketing, says: “Fund documentation has tended to be full of industry jargon and many groups have found it difficult to change that mind-set for KIIDs. If fund groups produce more of their documents in plain language, this would help with investors’ understanding and improve confidence.”
