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Advisers making full use of KIIDs, clients unaware of benefits


Most investment advisers find Key Investor Information Documents (KIIDs) useful and are using them to compare and select funds, but the documents have not been as big a hit with clients, according to a survey.

Two-thirds (65 per cent) of advisers reported that their clients are unaware of what a KIID is until shown them by their adviser.
Kii Hub, a provider of KIIDs, conducted a survey of 110 investment advisers at the end of 2013.
Most (80 per cent) advisers provided at least one reason why KIIDs are a better alternative to the simplified prospectus they replaced.  Almost half believe it is down to the standard template (46 per cent) and concise two-page format (44 per cent), with one-third citing the use of plain language (33 per cent) and having the risk information at a glance (32 per cent).  The majority (80 per cent) of advisers think KIIDs successfully provide like-for-like information for investors in a standard format, which is what they were set up to do.
Ian Overgage, director of technical fund marketing, says: “KIIDs have been a fact of life for advisers since July 2012, but it will clearly be some time before investors know they are an integral part of the advice process.  However, these findings demonstrate that KIIDs have achieved the aim of helping advisers compare funds throughout Europe in a consistent way for the first time.”
The information on charges is felt to be the most useful section on a KIID, chosen by one in three advisers, with half that number citing the risk information.  In total, 73 per cent of advisers think the on-going charges figure is helpful.
Half of advisers (51 per cent) believe that KIIDs provide enough information for clients to make an informed investment decision without requiring any further details.
Overgage says: “When investors come into contact with KIIDs through their advisers, it is good to know those advisers are generally confident that KIIDs provide useful information in the right format to help them select funds.”

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