25 October 2022
If you are covering the FCA’s latest Consultation Paper on Sustainability Disclosure Requirements and investment labels, please find below a comment from Beth Lloyd, head of responsible wealth management strategy at Quilter:
“Today’s consultation paper from the FCA is an important step forward to helping provide consumers with the necessary protections and boundaries when it comes to responsible investment. The lazy labelling of investment products as ‘ESG’ has not been helpful of late and has caused increasing confusion both to consumers and across the industry. Having clear definitions to adhere to and refer back to will not only help facilitate better understanding, but also result in better outcomes as expectations and reality are more likely to be aligned.
“This remains an incredibly complex area with a huge amount of terminology and jargon for people to get their heads around. As such it is important that disclosure is made as simple as possible and we welcome the regulator’s efforts to contribute to that.
“This is not final part of the journey though. The FCA has said it will consult on the role financial advice has to play in this. This is a fundamentally important next step as it is vital we see consistency across the value chain. The FCA has been clear on its intentions and how information should be presented to the end consumer. However, this will not be a substitute for proper research, interrogation and direct discussions with the end-client as such financial advisers and investment managers are going to play a crucial role here.
“We have further clarity on the regulator’s expectations, it is now up to the industry to help inform the final regulations through this consultation and help ensure they can work in the real world.”
