Added Perspective

U.K. regulator issues asset management market study

July 14, 2017

By Financial Conduct Authority

The United Kingdom's Financial Conduct Authority has published the final findings of its asset management market study and announced the package of remedies it will take forward to address the concerns identified in its interim report into the sector—including some around fund governance. “The asset management sector is important to the economy, managing the savings of millions of people, and in the current low-interest environment it’s vital we help people earn a return on their savings. We need a competitive sector, attracting investment into the United Kingdom which also works well for the people who rely on it for their financial wellbeing," said Andrew Bailey, chief executive. 

 

The final report confirms the findings set out in the interim report published last year. This found that price competition is weak in a number of areas of the industry. Despite a large number of firms operating in the market, the FCA’s analysis found evidence of sustained, high profits over a number of years. The FCA also found that investors are not always clear what the objectives of funds are, and fund performance is not always reported against an appropriate benchmark. Finally, the FCA found concerns about the way the investment consultant market operates.

Responses to the interim report from industry, investor representatives and others have helped the FCA develop the package of remedies.

 

“We have listened carefully to the feedback we received in response to our report last November. We have put together a comprehensive package of reforms that will make competition work better and help both retail and institutional investors to make their money work well for them,” Bailey said.

 

To access the report, click here.