The FCA said that it would also look at whether there were barriers to innovation and technological advancement in asset management. The study will cover retail and institutional asset management.
The regulator announced its intention to perform a market study into asset management in its 2015/16 business plan in response to concerns over competition issues in the sector, raised as part of the wholesale sector competition review in 2014.
At the time, the review said investors may struggle to judge costs and value for money from investment managers. It also questioned the role of investment consultants and potential conflicts of interest. There were also issues raised about the bundling of ancillary services.
The FCA will start to approach market participants immediately and will aim to publish its interim findings in the summer of 2016, with a final report due by the early 2017. The interim findings will indicate whether the FCA has found any areas of concern and how it proposes to address them.
Christopher Woolard, director of strategy and competition at the FCA, said: “Our market study aims to ensure that both retail and institutional investors can get value for money when purchasing these services – which we expect to further strengthen the UK’s position as a major centre for asset management.”
Guy Sears, interim CEO of the Investment Association, said: “As the FCA acknowledges, the UK’s investment management industry is one of the most successful in the world. The industry is a critical conduit for savings to flow productively into the economy, and a highly important export sector.
“We agree it is essential the whole investment chain functions effectively for its clients. We welcome the FCA’s decision, alongside its core focus on investment managers, to also consider the role of distributors and investment consultants, reflecting their critical role in delivering the best outcomes for our clients.”
