Five groups most at risk in the FCA asset management report
27 Jun 17
With the final report from the FCA’s market study of asset management due on Wednesday morning, speculation is rife about what the long-awaited recommendations could say.
We look at the five groups who could face the repercussions.
Clearly, fund managers are the key group at risk from the big potential changes set to be revealed on Wednesday.
Criticism of fund charges, fee clustering and underperformance were levelled at managers in the FCA’s interim report, and it seems likely that some changes to how funds charge clients and disclose costs are in the pipeline.
Over the last ten years, the regulator claimed fund charges had remained at around the same level despite their growing size and despite the growing competition from passive funds and index trackers.
Ultimately, fund charges could not be justified as, “overall, our evidence suggests that actively managed investments do not outperform their benchmark after costs,” the FCA said, and recommended a single “all-in” fee approach to fund charges.
The single fee would aim to improve visibility and impose greater discipline on fund groups, it added.
Tags: Asset Management | FCA
