Following reports that the City regulator wanted to shake up the way that fund management houses pass on the cost of third party research to consumers, the FCA’s head Martin Wheatley revealed the watchdog will consult with asset managers over how and where dealing commission is spent.
“This is a critical period for the industry; a crossroads,” Wheatley (pictured) said. “We need to be confident managers are putting their clients’ value for money, good returns, and transparency at the heart of how they do business. Then the discussion is about how best to get there – is evolution enough, or do we collectively need to be more revolutionary?”
Throughout the consultation, the FCA will work with asset managers to come up with an appropriate regulatory solution, it said, announcing the review.
The process will also involve policy makers in Europe, a consultation paper being drafted in early November and a thematic review that follows up the FCA’s work into conflicts of interest within the asset management industry.
Previously, trade bodies such as the Investment Management Association (IMA) have spoken out about the need for increased transparency within the £5.4trn sector, and the IMA has been conducting its own investigation into the issues raised by Wheatley.
IMA chief Daniel Godfrey said: “The IMA has been conducting a significant review of this market for some months and we expect to be able to report our conclusions early in the New Year. Our clear objective is to ensure we deliver the greatest possible value for money, transparency and accountability to our customers and we will explore all possible avenues to make sure we do just that.”
