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COBS 13.4 Contents of a key features illustration

COBS 13.4.1RRP

1 A key features illustration must include appropriate charges information and, if it is a packaged product which is not a financial instrument:

  1. (1)

    must include a standardised deterministic projection;

  2. (2)

    the projection and charges information must be consistent with each other ;

  3. (3)

    it may also include alternative projections except that the most prominent projection must be a standardised deterministic projection.

Exceptions

COBS 13.4.2RRP

When the rules in this chapter require a key features illustration to be prepared, it must not take the form of a generic key features illustration:3

3
  1. (1)

    unless 3there are reasonable grounds for believing that it3 will be sufficient to enable a retail client to make an informed decision about whether to invest; or

    3
  2. (2)

    if it is part of a3 direct offer financial promotion which contains a personal recommendation; or3

    3
  3. (3)

    if a personal pension scheme or a stakeholder pension scheme is facilitating the payment of an adviser charge; or3

  4. (4)

    if a group personal pension scheme or a group stakeholder pension scheme is facilitating the payment of a consultancy charge and the combined effect of the consultancy charges facilitated by the product and the product charges is not consistent for all investors in the relevant group or sub-group; or3

  5. (5)

    unless it is prepared for groups or sub-groups of employees in a group personal pension scheme or a group stakeholder pension scheme and it contains:3

    1. (a)

      a generic projection which is prepared in accordance with COBS 13 Annex 2 paragraph 1.3 and based on a default fund or other commonly selected fund;3

    2. (b)

      an effect of charges table calculated in accordance with COBS 13 Annex 4 R paragraph 2 and contains additional rows that show a range of typical periods to retirement age; and3

    3. (c)

      reduction in yield information which is calculated in accordance with COBS 13 Annex 4 R paragraph 3.3(2) and combines the product charge and, if applicable, the consultancy charge.3

COBS 13.4.3GRP

A generic key features illustration 3is unlikely to be sufficient to enable a retail client to make an informed decision about whether to invest if the premium or investment returns on the product will be materially affected by the personal characteristics of the investor.

3
COBS 13.4.4RRP

There is no requirement to include a projection in a key features illustration:

  1. (1)

    for a single premium life policy bought as a pure investment product, a product with benefits that do not depend on future investment returns or any other product if it is reasonable to believe that a retail client will not need one to be able to make an informed decision about whether to invest; or

  2. (2)

    if the product is:

    1. (a)

      a SIPP from which no income withdrawals are being taken; or

      4
    2. (b)

      a life policy that will be held in a CTF or sold with basic advice (unless the policy is a stakeholder pension scheme).

COBS 13.4.5GRP

Although there may be no obligation to include a projection in a key features illustration, where a firm chooses to include one, the projection must follow the appropriate requirements, as outlined in this section, or for financial instruments under COBS 4.6.7 R.