Should the FCA scrap the 10% drop rule?

Earlier this year the Financial Conduct Authority announced plans to review the controversial 10 per cent drop rule, which was introduced by Mifid II in 2018 and means clients must be informed when their portfolios drop by 10 per cent or more.

The rule has been suspended since the beginning of the Covid-19 pandemic due to increased market volatility, a suspension which the FCA has said will continue until the end of 2021.

But now the UK has left the European Union, what should the FCA do about this rule following its review? Should the rule be scrapped completely? Or can it be saved.

This week FTAdviser digital editor Damian Fantato is joined by Tim Fassam, director of government relations at adviser trade body Pimfa, and Greg Davies, head of behavioural science at Oxford Risk, to discuss these questions.

They also discuss what advisers can learn about this rule about communicating investment performance with their clients.

The FTAdviser Podcast is the weekly podcast for financial advisers, brought to you by FTAdviser. Each week, FTAdviser is joined by guests from the industry to discuss the week in news and pressing industry issues.

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