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.
One particular group of fund managers that were picked out for critique by the FCA in November were those managing absolute return funds.
Offering steady and targeted returns, the sector has been criticised for confusing investors in the past who could mistake the targeted return as a guarantee.
The FCA went a step further claiming the funds did not compare themselves against relevant benchmarks and slammed fund managers who charged a performance fee even when they underperformed
The FCA said: “We have concerns about absolute return funds that charge a performance fee when returns are lower than the performance objective the fund is aiming to achieve.
“The manager is rewarded despite not achieving what the investor considers to be target performance.”
They could be a potential target in the FCA’s final report.
Tags: Asset Management | FCA
