The FCA says it will look to intervene on costs in the fund management sector if there is “inadequate competition” in the market.
Speaking at a briefing on the FCA in Canary Wharf last week, FCA chief executive Martin Wheatley said it is too early to tell whether the RDR has delivered lower costs for consumers.
He said an expected “side product” of the RDR is to allow consumers to shop around based on value.
Asked by Money Marketing what the FCA will do if fund management charges are not driven down by the RDR, Wheatley said: “If the structural changes do not happen because there is inadequate competition in the market, then we have got a set of competition powers we can use at that moment.
“The funds industry is an interesting one as it is marketed on hope, that is, you hope the performance over the last three months will continue over the next three years. There is very little competition on cost in the industry, and in most industries you would expect there to be a bit more price competition.”
Thameside Wealth director Tom Kean says: “It would be sheer madness and folly to tamper with natural market forces. Firms should be able to set their own charges and Wheatley should be warned to leave well alone.”