FCA publishes interim asset management market study

The FCA has today published interim report MS15.2.2 in connection with their Asset Management Market Study.

The FCA’s chief objective for the market study was to ensure that the market works well and that the investment products consumers use offer value for money.  The market study was launched in November 2015 in response to a number of concerns raised by stakeholders.

Overall, the FCA found that there appeared to be weak price competition in a number of areas of the asset management industry.  This could thereby have a material impact on the investment returns of investors in respect of the charges for asset management services.  The FCA also raised concerns about a number of aspects of both the institutional and retail market, and their impact on effective competition.

Consequently, the FCA has decided to consult on whether to refer the market to the CMA.  The report also proposes a number of remedies, including:

  • a strengthened duty on asset managers to act in the best interests of investors;
  • requiring clear communication of fund charges and their impact at the point of sale, and in communication to retail investors;
  • requiring increased transparency and standardisation of costs and charges information for institutional investors; and
  •  recommending that HM Treasury considers bringing the provision of institutional investment advice within the FCA’s regulatory perimeter.

Responses to the report are requested by 20 February 2017, and the final report will be published in Q2 2017.

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