The cost section is where the UK’s new Product Summary departs most sharply from the PRIIPs KID, according to Zeidler. Reduction in Yield (RIY) calculations are gone. Implicit transaction costs are no longer disclosed. Performance fees are now shown separately through worked examples rather than folded into a single percentage.
For investors, Zeidler argues, the outcome is a far clearer disclosure. The Product Summary no longer projects costs across several holding periods using assumed returns. It shows what a product actually cost over the previous 12 months. For firms, though, the difficulty lies less in presenting the figures than in producing them. The regime brings new calculation methodologies, and many firms must keep producing EU PRIIPs disclosures under a separate rulebook.
Under the Consumer Composite Investments (CCI) framework, costs fall into five standardised categories. One-off entry costs cover charges paid on purchase, such as entry fees, structuring costs, capital guarantee costs and applicable taxes. One-off exit costs apply on sale or redemption. Both are shown as a percentage and a monetary amount. The ongoing costs figure (OCF) is the headline measure and captures the annual cost of running the product. For fund-of-funds, underlying costs are generally rolled into the OCF. The main exception is underlying closed-ended funds, whose ongoing costs are disclosed separately.
Only explicit transaction costs, such as broker commissions, exchange fees, taxes and other directly attributable dealing expenses, are now included. They are calculated from 36 months of trading activity, or a reasonable estimate where history is shorter, and sit apart from the OCF. Performance fees and carried interest must be explained in plain English, with at least one worked example based on a hypothetical £10,000 investment.
Every cost is expressed against a representative £10,000 investment over a single 12-month period, rounded to the nearest pound. Newer products may use reasonable estimates, and firms can adjust figures where future costs are expected to differ materially.
Zeidler notes that the FCA’s aim is simply to make costs easier for retail investors to grasp. RIY projections, though technically sophisticated, often confused investors. The arrival price methodology for implicit costs also drew heavy industry criticism, as results could swing widely and even turn negative.
The operational burden remains substantial, Zeidler warns. Firms distributing in both the UK and the EU may now show different cost figures for the same fund across UK Product Summaries, EU PRIIPs KIDs, EMT templates, MiFID disclosures and factsheets. Strong governance will be needed to explain these gaps to distributors and investors. Fund-of-funds managers still need reliable underlying data to calculate synthetic ongoing costs. Performance fee illustrations also create a fresh governance challenge, because assumptions must be selected consistently so that disclosures stay fair and balanced.
Zeidler recommends that firms focus on three priorities now: comparing existing PRIIPs calculations with the CCI methodology, identifying the data needed for the OCF and explicit transaction costs, and setting a consistent approach to performance fee examples. For cross-border firms, running two cost disclosure regimes side by side is likely to remain one of the transition’s biggest implementation hurdles.
For more, read the full story here.
Copyright © 2026 RegTech Analyst
Copyright © 2026 RegTech Analyst
