View more on these topics

FCA moots new rules for fund objectives

FCA building FCA feesThe FCA has published a further consultation on how information on funds can be made clearer.

In a highly anticipated policy statement published today, the FCA has set out the next steps to solve some key concerns it found within the investment industry following a widespread sector review.

In July, the FCA released the findings of the interim report into the sector which highlighted weak price competition in various areas of the investment industry, including “the evidence of sustained high profits” for firms over many years and a lack of clarity around funds’ objectives.

In a further consultation launched today, the FCA has asked fund groups to provide feedback on how they can improve the way they communicate fund objectives to clients.

While the regulator has not suggested a drastic overhaul of marketing material, it proposes that fund objectives should be set out in plain English to make them more useful to investors.

It also proposes new rules to force managers to shed clarity on when a fund is benchmark-constrained, when a fund’s holdings differ from the index and how to disclose information when a fund uses one or more benchmarks.

The FCA says fund managers “rarely” explain why or how they are using particular
benchmarks.

A working group to review how funds compare to each other and solve the opacity of information was set up by the FCA after its report last year.

The regulator also intends to make new rules so that in case of a lack of benchmarks for funds, asset managers should give investors an indication of how should they assess performance.

It is also consulting on changing rules around performance fees, suggesting these will have to be calculated net of other fees “in all cases”.

The consultation is open until 5 July.

Recommended

Royal London drawdown sales spike

A spike in drawdown sales has helped Royal London report a 68 per cent increase in individual pension business. The provider says that as “customers continued to take advantage of the pension freedoms”, new business sales of individual pensions including income drawdown in 2017 grew from £3.8bn to £6.3bn. Royal London chief executive Phil Loney […]

Phil Wickenden

Phil Wickenden: Start building your centralised retirement proposition now

Seventy-two per cent of advisers agree there is a need for a more robust and centralised retirement income planning process. This figures, as a) most advisers will typically be managing money for longer due to both greater numbers selecting drawdown and continued management of money post-death, alongside b) the inevitable increasing complexities of decumulation. Yet, […]

Tapering of annual allowance – adjusted and threshold income

The definitions of adjusted income and threshold income used to determine whether, and to what extent, someone’s annual allowance will be reduced can be confusing.  Here we try to make sense of it all. The annual allowance will be reduced for high income individuals from 6 April 2016.  Our previous article Tapering of annual allowance […]

The times they are a-changin’

After joining Artemis last year, Cormac Weldon launched the Artemis US Equity, US Select and US Smaller Companies funds. A lot has happened in the US economy since — including a period of unexpectedly weak growth in the first quarter of this year. US stocks, however, have produced positive returns and all three funds are comfortably […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment