The UK's Financial Services Authority, judging from the language of its latest consultation paper on the subject, has decided to stop forcing firms to send customers various pre-sale and post-sale disclosure documents.

The documents in question are the ‘Consumer-Friendly Principles and Practices of Financial Management’ (CFPPFM) to be issued before a sale is made, and the after-sales 'short report'. The former sets out the approach of the firm in question to managing and operating its with-profits business, including its approach to setting bonus rates, smoothing (see below) and market value reductions. Its disappearance is likely to be of direct interest to insurance companies operating with-profits business, their customers, potential customers and firms providing advice on this business. The latter is a half-yearly disclosure report produced for investors in retail authorised funds showing the most useful and relevant information about the funds' performance and activities during the year or half-year under review. Its disappearance is likely to be of interest to authorised fund managers of UCITS (Undertakings for Collective Investment in Transferable Securities) schemes and non-UCITS retail schemes, and service-providers such as platforms or third-party administrators. The consultation paper is CP 15/32.

The 'smoothing' of payouts has long been an inherent feature of with-profits business where, when markets are rising, part of the amount that would otherwise be paid to policyholders is held back to give some protection to the level of payments made to policyholders when markets are falling. However, in the real world, such smoothing cannot be unlimited, as eventually the point may come when payments of more than the value of the assets underlying the policy will be detrimental to the interests of the remaining policyholders.

The FCA is thinking of retracting some suggestions as well as some rules. The disclosure rules are to be found in the FCA's Conduct of Business Sourcebook. Guidance (as opposed to rules) in COBS 6.3 (nearly all of which the regulator wants to jettison) suggests that firms that offer advice to retail clients such as HNWIs, or arrange transactions for them in relation to packaged products, might like to use the ‘Services and Costs Disclosure Document’ templates that the old Financial Services Authority drew up in 2008 to outline their services and the consequent costs. Anecdotal evidence suggests that the template leads firms to duplicate the effort involved in keeping their consumers informed and only serves to encourage the FCA's eternal bugbear – a "tick-box approach" to such disclosures. Anyone who hears any denial on the part of the FCA that it is not a continuation of the FSA by other means should heed its comment in section 4.7 of the consultation paper: "This was not our policy intention when we introduced the guidance and templates."

A new European Union regulation (the Packaged Retail and Insurance-based Investment Products or PRIIPs regulation) will take effect in the UK on 31 December 2016. This will require all manufacturers of retail investment products, including with-profit insurance contracts, to provide potential customers with Key Information Documents (KIDs) that will outline the costs, risks, potential performance and other key information associated with these investments. Although the regulation will not apply to pension products, once it is in force it will provide HNW customers of other with-profit insurance policies with important information about these investments. Most of the information included in the PRIIPs KID will be different to that in the CFPPFM, but it will help customers to understand with-profit business.