Carillion, EMIS and KPMG

Now that the dust has settled somewhat after the demise of Carillion (CLLN), it’s worth adding some more comments to my previous blog post on the subject. Ultimately it went bust for the same reason most companies do – it simply ran out of cash and could not pay its debts as they became due. As I said before, it collapsed eventually because of ballooning debt, poor cash collection and risky contracts.

Unfortunately it seems that private investors were some of the biggest losers in this debacle. Big investors had either bailed out, hedged their exposure or were actually shorting the stock. According to a report in the FT retail investors held 16% of the shares through Hargraves Lansdown towards the end, 7% on Barclays platform and 7% on Halifax meaning that overall they must have held a much higher proportion of the shares than in most large companies. It would appear retail investors are suckers for a “cheap” stock, or those that are paying nominally high dividends.

As Terry Smith of Fundsmith says in his recently published newsletter to investors, which is well worth reading, he is “asked far more frequently whether a share, a strategy or a fund is cheap or expensive than I am asked about what returns the companies involved deliver and whether they are good companies which create value or not”. He looks at the latter rather than former when investing.

Why did Carillion go straight into liquidation rather than administration? Apparently there was very little cash left in the business and potential administrators were concerned about getting paid. Administration was of course devised as a way to keep companies trading and hence protect jobs and the business of suppliers while potentially enabling it be restructured and sold in due course. Liquidation is an abrupt process where the liquidator just closes everything down immediately. In both cases, trade and other unsecured creditors, plus shareholders, usually end up with nothing although there is some flexibility and more chance of repayment in an administration. In Carillion the Government is picking up responsibility for its own contracts with the company, and the associated jobs may remain, but all others are likely to face severe difficulties and many smaller suppliers may go bust. That applies even to those contracts where Carillion was only a “partner” in a larger consortium.

Now there is one similarity between the two. Administrators or liquidators, and the major secured creditors (normally banks) to which they report, are as keen to dispose of any assets as soon as possible so they can get paid (or recover their debts) quickly. Hence any assets get sold very quickly, often to related parties at prices that the original owners think are ridiculously low. I have written extensively in the past on the abuses associated with “pre-pack” administrations where this problem is particularly rife as there is often little or none “open marketing” of the assets.

Carillion is a very good example of what is wrong with insolvency law in the UK. Carillion employed many skilled staff and some parts of the business may have been viable but the whole lot was brought down by a few dubious contracts taken on at low margins by incompetent management. The damage, and associated costs, of this debacle will be enormous – and in this case will fall on the public to a large extent as the Government has had to step in. Is there a better way? It is my opinion that the Chapter 11 process in the USA is much better. It does enable a company to be protected from its creditors before it gets into an impossible situation, i.e. it allows time for restructuring. The result for ordinary shareholders may not be a lot better, and jobs will be lost, but for everyone else it is superior.

Regrettably in the UK, insolvency law seems to have been devised mainly in the interests of insolvency practitioners and bankers. It is time for a complete reform of the law and practices in this area.

One aspect of Carillion that has been raised is whether the company should have obtained a clean audit report less than a year ago (auditors were KPMG). One thing auditors should report on is whether the company would be likely to be going concern for the foreseeable future – and that typically means more than one year. Otherwise the accounts should be “qualified”. Were the financial difficulties and potential cash flow problems not already apparent to the auditors and to the directors of the company? Is this yet another audit that the Financial Reporting Council (FRC) should be looking into?

EMIS Group (EMIS)

Yesterday, EMIS Group, issued a trading statement and a note on a “review of customer and product support processes”. The share price dropped 20% on the day. EMIS provides medical software and services to GPs and the NHS. It is one of my longer standing holdings, so I am none too happy about this. It’s one of those issues that however diligent one is as an investor, one can get caught out on.

What’s the problem? It seems that “certain service levels and reporting obligations with NHS Digital” have not been met. The financial impact might be up to £10 million which is about a third of last year’s profits.

I have sent the following note to the Chairman to try and elucidate the issues (I’ll advise subsequently on the answers):

“I was of course most disappointed to read the announcement of today’s date regarding “customer and product support processes”.

I would like to receive more information about the nature of the contracts that have resulted in the large potential liability. I understand you are still assessing the potential liability but the announcement should really have spelled out the nature of the commitments that seem to have been made by the company previously, and which have not been adhered to. I am also surprised that such a large liability is being announced when no apparent claim has been received (at least none is indicated), and no financial loss to the third party concerned is being reported.

I also question why the potential liability and risks associated with the relevant contracts were not disclosed in the Annual Report for the year ending December 2016. Indeed there is extensive discussion of “risk” in the business in that document and the risks the business face were apparently reviewed in that year by the board of directors. The risks of all kinds were generally reported as “low”, when it seems that a major undisclosed risk was being run.

One could also question why the audit by KPMG failed to identify this apparently major defect in the company’s systems and accounting for the liability. Did they not review this aspect of the company’s activities?

Lastly there is no indication in the announcement as to how long this failure which has caused the potential liability has been going on. Perhaps you could answer that question, and also indicate whether it may be necessary to restate past accounts.”

As noted above, KPMG were the auditors to EMIS as well as Carillion so this is yet another company where perhaps the FRC should look into the audit. My opinion is that investors should be able to rely on the published accounts of a company but all to frequently of late we see that this is not the case. Grossly misleading accounts resulting from incorrect if not fraudulent revenue recognition (Blancco, Redcentric, Globo, Quindell – you can probably name others), or over optimistic statements about the financial health of the business (possibly Carillion, and HBOS) are simply too common.

Auditors often say investors expectations of what an audit can achieve are too high. But surely there is something fundamentally wrong with their processes if such major failings are not identified?

One other aspect of this problem is I suggest the use of aggressive bonus schemes, particularly LTIPs, that can pay out many times the base salary of executive directors. The result is an incentive to report higher revenues and profits and to conceal the bad news from the company’s shareholders. This may have been a factor at both Carillion and EMIS. Incentives of some kind are all very good if they motivate appropriately. But when they are such a large proportion of the likely remuneration, they distort behavior in the extreme, often with perverse results.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson )

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Carillion Goes Into Liquidation

Carillion (CLLN) has gone into liquidation. No messing about with “administration” – it’s gone straight into liquidation with a receiver being appointed. The Government may apparently take over direct responsibility for some of the contracts that Carillion operated to provide public services, but it is unclear what will happen to the commercial contracts. Up to 43,000 jobs are at risk. In addition, many other companies are at risk who acted as suppliers to Carillion because as trade creditors they are likely not to get their debts paid.

Why did this £5.2 billion revenue business collapse? In essence ballooning debt, poor cash collection and risky contracts. The construction sector has been one with low profit margins in the last few years (builders seem to take on work just to help their cash flow from advance payments regardless of the likely profitability according to a conversation I had with a director of such a company). But building anything is risky and the bigger the projects, the bigger the risks. Managing such complex projects (such as building part of HS2 which is a contract they won) is tricky however experienced you are. Time over-runs can kill you, and fixed price contracts are anathema in any business, but the Government tends to insist on them.

This was and is the kind of business to avoid investing in however cheap it looks.

Needless to say, the equity shares in Carillion are now almost certainly worthless.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson )

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ShareSoc Takes Up Blancco Complaints

As a small shareholder in Blancco Technology Group (BLTG) I reported on the events at their AGM in a previous blog post. This company had to restate their accounts following discovery that some of the previously recognised revenues were invalid. It calls into question the competence of the past audits of the company and the management of the business.

ShareSoc has now taken up the issues and has requested both the Financial Conduct Authority (FCA) and Financial Reporting Council (FRC) to investigate what happened. See this press release that ShareSoc issued for more information: https://www.sharesoc.org/sharesoc-news/sharesoc-requests-investigation-affairs-blancco-technology-group/

Shareholders in this company have lost substantial capital as a result of the failure to recognise revenue correctly, a failing all too common in IT companies and which, for some reason, auditors seem unable to spot.

If you were or are a shareholder in Blancco, you can register your interest in this matter on the ShareSoc web site so that you are informed of future news.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson )

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Want to Get Rich Quickly?

Do you sincerely want to be rich? That was the sales slogan used by fraudster Bernie Cornfeld which attracted many. Or perhaps even better, do you want to sincerely get rich quickly? That is in essence the sales pitch used by many promoters of CFDs (Contracts for Difference).

CFDs are geared investments in stock market shares, bitcoins, commodities or any volatile instrument where you can magnify your profits many times. Or of course magnify your losses. You can, to put it simply, lose all your money and very quickly. Last week the Financial Conduct Authority (FCA) wrote a stern letter to CFD distributors saying in essence that their review revealed substantial failings in the rules that they should have been following.

CFD products are complex and risky and are not suitable for inexperienced or unsophisticated investors. But 76% of retail customers for CFDs lost money in the year to June 2016 according to the FCA which clearly indicates that there are plenty of suckers out there who are being exploited. One of the many problems that the FCA discovered was inadequate client qualification with many relying on broad descriptions of “sophisticated” and “financially literate”. Indeed, they often relied solely on the client’s words about their knowledge and experience and their qualification to be classed as “elective professional” clients which effectively relieves the seller of any responsibility for the advice they give.

This problem extends not just to CFD providers but historically has been a big problem in the promotion of shares in unlisted companies, the small cap companies listed on AIM and in some overseas markets. If reliance is placed on what the client says about their competence and ability, it’s rather like asking a motorist whether they are a good driver – they will all say yes.

In essence there surely needs to be a better way to tackle this issue. If that cannot be devised then the FCA is likely to get much tougher in policing the market for CFDs.

But the FCA should not be too concerned. If those who speculate in CFDs lose the ability to do so, they’ll just move onto something else like trading in bitcoins or forex – and there are lots of promoters of those around. The problem really comes down to basic financial education. Folks need to learn at an early age that there are no quick ways to get rich. If they do not then they will fall for the latest scam regardless of the actions of regulators.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson )

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Unicorn AIM VCT Annual General Meeting and APC Technology

Yesterday I attended the AGM of Unicorn AIM VCT (UAV) which is of course a Venture Capital Trust. I am generally not wildly keen on AIM VCTs from past experience – they tend to buy shares in companies from IPOs and Placings when the prospects for the company are being puffed up by promoters, and then they have no ability to intervene when problems arise as do VCTs who invest in unlisted shares and with onerous shareholder agreements. Neither can they get out easily because selling large blocks of shares in the market of such companies is not easy. You can see this from the portfolio of shares they hold – 75 “qualifying” shares including what I consider to be such dogs as Crawshaw and Grafenia. Lots of “zombies” in there – walking dead companies going nowhere fast.

From the presentation it transpired that UAV cannot even now fund such companies further if they get into difficulties because of the new VCT rules which emphasize investment in younger, growing companies. Indeed a presentation from one of the investee companies later in the meeting (from APC Technology) was a great example of the risks and problems of investing in early stage businesses (original cost £3.1 million, now valued at £226,000!)

However AIM VCTs have been doing better of later as the AIM market total return was 24.4% last year (some of the really hot stocks would not be VCT qualifying though). In comparison UAV achieved a total return of 7.4% last year which is not brilliant, and was much less than that from another AIM VCT I hold.

The meeting commenced with the formal business. One director absent with flu. All resolutions passed by large majority of votes and little opposition on the “show of hands”.

I did raise the question of the two directors on the board who have served for more than 9 years (Chairman Peter Dicks, aged 75, who is not the most loved of VCT directors from the events at Foresight VCTs) and Jocelin Harris, and the impact of the proposed new UK Corporate Governance Code which is tougher in this area. The answer I got was they were looking at board succession, but the Company Secretary claimed they can ignore the UK Corporate Governance Code because they follow the AIC Code. I disputed that they could do this and I spoke at length with him on the subject later. VCTs are fully listed companies and hence in my view need to adhere to the UK Corporate Governance Code. Their claim to be able to refer solely to the AIC Code, based on an ambiguous letter from the FRC Chairman who probably did not have the power to amend the rules for investment companies, is dubious in the extreme. I did say to him that in my view all directors of VCTs should be “independent” and although I have no reason to question any impropriety in this company, retirement after 9 years is a good principle.

Note that apparently only 6.8% of shareholders submitted proxy votes (there were over 50 in the meeting). I am not surprised the turnout is so low when I had great difficulty in voting myself. No paper notice of AGM, proxy voting form or Annual Report sent even though I am on the register, just a simple letter sent via email saying I could vote on-line. Bearing in mind I have never authorised them to use my email address for that purpose, I complained to Link (formerly known as Capita) about this. They are amending their records. Could I have voted on-line? Perhaps but having had numerous past difficulties with the Capita system for that I did not even attempt to try.

After the formal business, we had a presentation from APC Technology by CEO Richard Hodgson. He covered the history of the company. It ran into difficulties before he took over when it had a problem with high debt and aggressive actions by their bankers HSBC. The business used to be in fire and pest control but is now focused on distribution of electronic components. They tried a failed diversification but then decided to “stop doing the stupid stuff” and are now profitable. He mentioned they are into “smart buildings” which I have an interest in, but they are not sure who is going to pay for it – tenant or landlord. They also seem to like to make acquisitions of niche businesses where the owners wish to retire (a bit like the Judges Scientific model but smaller).

The last financial figures for APC are revenue £15.6m, profit before tax £0.2m (to August 2017). Is this an exciting business going somewhere? I doubt it on the cursory information provided and it’s in a sector which I have found tricky in the past and hence one I generally avoid.

We then had a presentation from fund manager Chris Hutchinson. He admitted total return was not the greatest this year and other VCTs had done better. But they did raise £48 million in new capital of which £12m had already been invested in 6 new investments. (Note: it is wrong to judge any investment company by its performance over one year – you need to look at the long term track record). As other VCTs have warned, under the new rules new investments are likely to be in earlier stage companies and returns might therefore be more volatile and lumpy.

I won’t cover his talk in depth nor the questions that arose, apart from the fact that one shareholder raised the issue of IDOX – one of the VCTs larger holdings (and one I hold directly). Chris said his view was that it was not “holed below the water” but there may be more negative adjustments to come. Sounds like they will be holding for a recovery, but then one gets the impression that they hold onto companies through thick and thin. I would prefer that they got rid of some of the dogs and had a more focused portfolio – 75 qualifying companies plus some non-qualifying is a large portfolio when small companies need a lot of monitoring.

In summary a useful meeting if unexciting.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson )

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Wey Seminar – The Future of Education?

Yesterday I attended a presentation by Wey Education (WEY). This is a small AIM-listed company in which I hold a very few shares. This is one of those “hot” AIM companies where the valuation discounts a lot of anticipated future growth in revenue and profits. Last year (year ending August 2017), revenue was £2.4 million (up 60%) and post-tax profits all of £17,000, albeit a big improvement on the previous year. Broker WH Ireland forecast growth this year partly because of a recent acquisition and from anticipated investment in marketing – they raised £5m in a placing for the acquisition of Academy 21 but will have lots of cash left over from that for other purposes.

I won’t say much more about the financials because the seminar of over 2 hours barely mentioned them but concentrated on operations, business model, marketing etc. I understand there were a lot of questions asked about the financials in the mornings AGM particularly on “related party transactions” from speaking to the Executive Chairman David Massie before the meeting started. He also mentioned some of the history of the company which seemed somewhat “fraught” with a legal suit against the former CEO that they won (see “exceptionals” in the accounts).

Wey focuses on on-line education and have four primary brands – InterHigh which provides iGCSEs and A-levels on a non-selective basis, Wey ecademy which sells similar courses but on a B2B basis to education providers, Infinity Education which is a selective premium fee paying online school now mainly focused on international markets and a new venture named Quoralexis which provides courses in English as a Foreign Language (EFL).

The business has been around a long time with the founders still involved, but it is not regulated as a “school” for technical reasons but it does qualify as an “examination centre”. Seventy percent of pupils are based in the UK and there are 5,000 pupils with about 1,000 “live” lessons per week. All the teachers are employees, although some are part time.

The above is taken from the first presentation session from David Massie. As he said “Education is the last great unreformed business” where the vast majority of provision is conventional classroom education. The latest innovation has been moving from blackboards to whiteboards! Comment: you only have to look at the national education budget to see that a very high proportion of the expense is in teachers’ salaries and their productivity has not changed since Victorian times.

Apart from that aspect there are a number of pupils who need on-line education. For example, offspring of ex-patriots in remote locations, those suffering from medical conditions, those subject to bullying at school, those wanting a better education than local schools can provide, or waiting for school places, and for several other reasons. Pupils can interact via speech, text or private messages with the teacher and the lessons are taught in real-time like a conventional school – they are not self-paced downloaded videos.

InterHigh is ramping up marketing expenditure, recruiting a finance director and after that probably an HR director. Marketing will include a series of video advertisements in Waterloo station. They see that as a location with high footfall of folks likely to have children and an income to cover the cost. No cost for that advertising was mentioned but I can imagine that as being expensive. I asked Jacque Daniell who looks after marketing later about whether they had tried direct mail (off or online), but it seems they only use that in promoting Wey Academy.

They do have some internet marketing – for example have a tie up with Mumsnet, but their level of search engine awareness is low. Type “online gcse courses” into Google and they are nowhere, with lots of competitors offering lower cost with different course provision models.

The InterHigh web site does not look great in marketing terms – lots of talk about “features” and what they offer, but no great focus on benefits, on the home page. However there are some good “customer stories” on other pages.

Comment: I do not think they have cracked the marketing model as yet to really get business ramping up quickly. I am not convinced that advertising to every man/woman and their dogs on train station platforms will be cost effective. There are surely lots of ways they could spend more on internet marketing which might be more cost effective because you can focus more specifically on the likely target markets.

Jacque spent a lot of time explaining their interest in AI (Artificial Intelligence). When I asked how that would be beneficial when it seemed to me that they had a good product and it just needed to be more actively marketed (i.e. AI might be a management and funds diversion), she said it would help to “engage” pupils. Presumably she meant recruit pupils because retention seemed to be of lesser interest (they have a high “drop-out” rate but that is probably to be expected from the kind of pupils they attract).

Comment: As a former IT professional, I find the current focus on AI to be as over-hyped as it was back in the 1980s. I was involved in a natural language database inquiry project at the time, and that area has certainly moved ahead since – for example Google on my smartwatch gave a sensible answer to the verbal question “does a fruit fly like bananas” which can be one of those tricky questions for such systems. When I asked it “does time fly like an arrow” it correctly identified I was trying a well known semantic trick question. A bit of “ad-hoc” programming in there I suspect. But how will AI, which is a very broad field, really help the sales revenue or operations of Wey? I am not clear at all.

These are a couple of questions that were not answered in the seminar (and not enough time left for questions when the whole event was too long):

  • What are the main competitors? (mainly conventional schools I would guess).
  • What percentage of the on-line education market do they have?

I am also not clear why they are investing money in Quoralexis – EFL courses seem to be a very crowded area although David Massie said the current providers are “rubbish”. It would seem to be a diversion to me.

Incidentally when I am looking at early stage companies I like to check they have the basics right – like registering their brand names as trademarks. I could not find a UK registration for “Quoralexis”. Nor could I find anywhere on their web sites some basic legal terms/conditions of use, claims for trademarks, nor any site search function to help either.

In conclusion, this looks to be like a lot of AIM companies. The management tell a good story about the prospects for what they are offering, and the broker has great projections for future revenue and profits, but there is a lot still to prove I feel. The marketing seems somewhat amateurish and they need to spend a lot more on that to really drive awareness and take-up (they only spent £160k last year on marketing which is about 6% of revenue – not nearly enough). That does of course assume that the market is there to be developed to a decent size.

The current market cap is about £41 million. The “story” being promoted by David Massie sounds attractive but I’d like to see more evidence of success in getting a return on marketing expenditure and ramp up in sales before punting a large sum on this company. But that is of course only my personal opinion and no recommendation to trade in the shares of this company one way or another. Perhaps one to keep “under observation”.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson )

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KIDS – Who Is Kidding Who?

There was an interesting article published by Citywire yesterday on the subject of Hargreaves Lansdown removing 96 investment trusts from its trading platform. Such trusts as Dunedin Enterprise, Blue Planet and Oryx International Growth have been suspended. The reason is because they have not yet made available a “KID” (Key Investment Document) which is required by the new PRIIPS regulation and mandated by the FCA/EU from the start of this year (see https://www.fca.org.uk/firms/priips-disclosure-key-information-documents for more information).

At present investment trusts are mainly affected. Unit trusts and OEICs that are UCITS have another two years to comply.

The Citywire article quoted Annabel Brodie-Smith and Ian Sayers of the AIC (trade body for investment companies) as saying it was only a transitional problem but that the mandatory performance figures in the KID “will in some cases, be suggesting too favourable a view of likely future performance” and the “single-figure risk indicator will potentially be understating the risks”. Mr Sayers has also criticised the fact that open-ended funds will not need to disclose underlying transaction costs when investment companies will need to do so, thus making comparisons difficult.

Investment Trusts are of course a peculiarly British investment platform whereas most of Europe use open-ended funds, and hence the legislation was focused more on the needs of the rest of Eurupe rather than the UK. The UK already had quite extensive disclosure of fund information, particularly for investment trusts which was published in such documents as a “Monthly Factsheet” with performance date readily available from the AIC web site, Trustnet and other sources.

I posted a comment on the Citywire article which said: “The regulations impacting investment trusts are a typical example of EU laws written by folks who do not understand the UK market environment, and are also generally ignorant of the financial world. The sooner we depart the better. Expensive and incompetent bureaucracy in more ways than one.”

That immediately prompted the usual abusive comments from EU lovers – anonymously of course. A vigorous debate then followed. So what is the truth? Are KIDs going to be useful? Were some trusts deficient in being up to speed on making KIDs available? Is the additional expense of producing a KID worthwhile?

Now it is undoubtedly the case that some investment trusts might have been tardy in meeting the regulations (although I believe Dunedin Enterprise Trust is winding down so they might have not put a high priority on it). But as it will prevent purchases but not sales, this needs to be rectified as soon as possible otherwise prices might be distorted.

But are KIDs useful? You can see one for JPMorgan Euro Smaller Companies Trust (a trust I hold) here: https://documents.financialexpress.net/Literature/83197092.pdf ). The risk rating is simplistic and the “performance scenarios” are likewise. It shows that over 5 years a holding in this trust might generate a negative return of 18.62% per annum, but in a “favourable scenario” you might make 36% per year. Does that help you? Not a lot.

That is particularly so as those figures are forecasts, not the real historic data. In comparison the information on the AIC web site or the company’s web site, including in the company “Factsheet” is much more comprehensive and more helpful. For example, it tells you about the historic price performance versus the net asset value performance (and over several time periods), the discount levels, the performance against a benchmark and lots more data.

The KID does have some useful information on costs, as it includes transaction costs. As a result it gives the “Impact on Return” due to costs of 2.81% per year whereas the AIC reports an “On-going” charge of 1.13% for this company because they don’t include transaction costs. This is a company that does not have a performance fee though which would complicate reporting on other trusts.

The objective of the KID to standardise the reporting of basic information on investment funds, and provide consistent and accurate “all-in” cost data was laudatory. But the implementation is a dog’s breakfast with the result that investors are hardly likely to spend a long time looking at these documents even if they are forced to do so.

On the latter point, the Share Centre now require you to tick a box to say you have read the KID before buying the shares, but other platforms such as AJ Bell YouInvest don’t seem to require that. I suspect folks will soon learn to tick the box regardless simply because most investors will have done some research on the fund, or already hold it (perhaps on another platform).

In summary, KIDs are designed to meet the needs of unsophisticated pan-European investors where little information might have been available to them previously. Whereas in the UK we are awash with information on trusts and open-ended funds to the point that a lot of investors are suffering from information overload. The KID just adds to it.

The information provided in the KID can be grossly misleading about the risks and returns that investors might expect. The document is the end result of the complex bureaucratic processes in the EU for devising new financial regulations, where those developing them seem to have little understanding of financial markets or investment and the end result is often a compromise between different national interests. The process is also heavily influenced by the large financial institutions such as banks that dominate the retail investment scene in much of Europe.

Financial regulation in the UK is not perfect of course, and we have the same difficulties that they are often written not for the benefit of investors but for market operators and intermediaries. We might just be able to do better. But we also need to push for improvements to the content of KIDs because we may still need to produce them to enable trading of investment trusts and funds across Europe.

It is though unfortunate that the cost of producing a KID will be significant and will be passed on to investors. Likewise the MIFID regulations brought in on the same date have resulted in major costs for stockbrokers. More regulation costs money and investors do not always benefit from it. One particularly disadvantage is that it deters new entrants into the investment world, i.e. protects the interests of the big boys from more competition. Financial regulations when devised need to be simple and low cost to implement and enforce. That is a long way from being the case at present. The PRIIPS regulations are a good example of how not to do it.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson )

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