The City watchdog confirmed it will support the introduction of single ‘all-in’ charges on funds to drive competition in the industry in its long-awaited review of the asset management market.
It will also bring in a new requirement for funds to have at least two independent directors on their boards and strengthen the duty of managers to act in the best interests of their clients.
The regulator stood by the criticism in its interim report, published in November last year, for weak price competition, claiming charges had remained high and fund managers had not passed savings through economies of scale through to clients over the past decade.
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.
Platforms came under fire from the regulator in the final report and a new market review of the platform market is set to take place.
The government has also been urged to bring investment consultants under the FCA’s remit.
Andrew Bailey, chief executive at the FCA, said it was essential savers saw returns in the current low interest rate environment.
“We have listened carefully to the feedback we received in response to our report last November,” Bailey said.
“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.”
More to follow…
