The FCA has been hinting at ramping up disclosure of platform and asset management fees, leading some to believe it is a matter of time before investors can compare prices for investment solutions as easily as they can for other consumer products.
Regulation such as Mifid II, alongside the FCA’s asset management and platform market studies, has shown the regulator’s intention when it comes to increasing transparency of costs and charges across the value chain.
However, questions remain whether comparison tools – particularly those that seek to compare platform costs with fund fees included – can overcome the complexity that is embedded in the market.
Taking transparency further
In its interim report on the platform market, published in July, the FCA was tight-lipped about how far it might take fee disclosure, but open about the fact it was looking at strengthening disclosure requirements already in place.
The report says: “We are not proposing additional costs and charges disclosure rules at this stage. Yet we want to see more innovation in the way platforms present their Mifid II costs and charges data.
“This will help consumers to assess and compare the total cost of investing; for example, by providing customers with interactive tools to calculate and personalise total charges, and to better raise awareness of fund charges.”
It goes on to say that, before its final report next year, the FCA will assess if the industry has innovated sufficiently.
The report says: “We will then see if we need to introduce further remedies to make sure the industry uses the opportunity created by Mifid II to genuinely help consumers compare and choose platforms.”
Mifid II came into force in January and has already mandated clearer communication of fund, platform and advice fees to clients.
On top of that, in April the FCA introduced measures that follow on from its asset management market study, requiring enhanced independence on funds’ boards, and tackling weak price competition and lack of clarity in fund objectives.
In line with their drive towards strengthening of oversight, Fundscape director Bella Caridade-Ferreira is taking her existing Compare the Platform tool one step further and developing a service that will allow a comparison between platforms with fund fees factored in.