There have already been three developments this week which ratchet up the pressure on the asset management industry, and it is only Tuesday at the time of writing.
By a stretch of coincidence the news of Cummings’ appointment has coincided with the release of the Financial Conduct Authority’s business plan for the coming year.
In it, fund management groups have arguably been singled out as the top target for the regulator’s wrath over the rest of 2016 and beyond.
The FCA has pointed to a ‘lack of consumer oversight and challenge’ and a particular issue in investment management with conflicts of interest.
The regulator also took the liberty of raising the amount of money it draws from financial services firms including asset managers by 7.8% to £519m.
Guy Sears’ interim hold on the top job aside, the man Cummings is replacing provides a still-raw example of how quickly things can go pear shaped in this particular job if you cannot strike the right balance between the immediate business priorities of the large asset managers and the long term relationship the industry has with the public.
Daniel Godfrey’s departure was largely born of a clash with some of the major firms over his efforts to drive through reforms, something Cummings will no doubt be very mindful of.
While few Investment Association members would publicly admit this, they may well have been cursing as they read news of Neil Woodford’s new transparency push announced on Monday.
They could be saying quietly among themselves that it is all very well to push for greater fee transparency and the ‘absorption’ of things like research costs when you are a ‘star manager’ with billions in just one fund, but what about boutique asset managers at the other end of the scale who are trying to make a profitable business out of funds a fraction of the size?
This sentiment would rightly or wrongly receive little sympathy among the wider public of course, given the general perception that all fund management firms make vast amounts of money.
And then there is everybody’s favourite country with a canal linking the Atlantic and Pacific Oceans. The leaking of the ‘Panama Files’ from a law firm heavily involved in offshoring assets has put the spotlight firmly on financial services firms and the wealthy people they often serve. Not in a good way.
