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FCA launches probe into fund manager competition

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The FCA has set out the key areas it will focus on in its market study into competition in the asset management industry.

The regulator will assess firms on how they compete to deliver value, whether they are motivated or able to control costs as well as how investment consultants affect competition for institutional asset management.

The FCA will also look at whether there are any barriers to innovation and technological advances in the asset management industry.

The interim findings of the study, which will assess both retail and institutional investors, will be published in summer 2016 and a final report by early 2017.

FCA director of strategy and competition Christopher Woolard says: “Asset managers provide an important economic function, bringing together those with money to invest and companies and governments that need capital. Given the significant role they play in the economy, it is essential that competition works effectively for these services.”

The market study into asset management is the second competition study looking into wholesale markets, following the publication of terms of reference on investment and corporate banking in May 2015.

Woolard says: “The UK is a world leader in asset management. Our market study aims to ensure both retail and institutional investors can get value for money when purchasing these services – which we expect to further strengthen the UK’s position as a major centre for asset management.”

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. Another project from the FCA’s What can we do next to justify our existence? committee.

  2. Of course the focus is on cost. What of innovation? We still don’t have (for example) a Vice fund in the UK. (Gambling, booze, Tobacco, Armaments – all with a peerless track record).

    Indeed what of performance at all?

    What of those managers who think outside the box. Pictet with their Security, Timber, Water and other specialist funds.

    What of different styles? Terry Smith (Fundsmith) Nick Train (Lindsell Train).

    These are presumably of no import to the bureaucrats.

    The forgoing are examples of matters appertaining to fund management other than cost.

  3. Indeed. The FCA evaluating someone else on “delivering value”. Risible.

  4. Maybe if they stopped wasting everyone’s money costs would come down. Don’t they understand that fund management firms are still paying for the RDR.

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