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FCA working group begins fees template testing

FCA working group head Chris Sier

The FCA is to meet fund managers to start testing the template it is creating to improve fund charges and costs disclosure.

In the next two weeks the institutional disclosure working group, chaired by transparency champion Chris Sier, will meet those fund groups who agreed to test the template, which is now in a draft versioM

Money Marketing understands the template testing will be followed by a public meeting in February where the working group and other FCA staff will discuss the results of the testing with a wider group of asset managers.

The independent panel was set up by the FCA in September following the package of remedies outlined in the regulator’s final report into the asset management industry.

An update on the working group’s progress in December says the group has looked into whether the template could be split into different, smaller templates for specific asset classes.

Some members of the group have also suggested different templates for different investor types.

The FCA panel continues to get asset managers involved with its work.

Sier has recently told the national press that he estimates £35bn a year is being overcharged from pension funds in hidden costs.

On those managers who had pushed back against reform proposals, Sier said: “The FCA has found you wanting. You’re not doing yourselves any favours by resisting this.”

Speaking to Money Marketing in November, he said that the asset managers complaining the most about the proposals “have the most to worry about”.

He said: “The market has realised this is happening regardless, the template is going to happen.”

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Comments

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

  1. What I would like to see is the FCA forcing all fund managers to clearly identify which share class of each fund they offer is the clean share class by using a particular letter at the end of the ISIN code, rather than all the fund management firms all doing their own thing, some use the ‘Z’ class others the ‘I’ class etc. I waste loads of time calling fund managers trying to find the correct ISIN codes for the clean share classes.

    The other thing I’d like to see is for the FCA and government come together and allow offshore & onshore bonds the ability to transfer between providers, without causing a chargeable event to be triggered. This would put the wind up those large insurance companies like Pru, Aviva, AXA etc who all have elderly policyholders in with-profit bonds normally taking their 5% to supplement their pension income, but many of these bonds were sold years ago when charges were much higher and can not be changed now without causing a chargeable event, so why not put the consumer in control and some competition in this massive market. These insurance companies receive billions year in year out from all those bonds that they know will never be moved as they are pregnant with gains. We can transfer an ISA and a pension, so why not allow insurance bonds to be transferred?

  2. Isn’t it ironic that the Government and the EU want the financial service industry to be more transparent on charges and then bans retailers for making an explicit charge for card transactions the cost of which will now be bundled up in the cost of the product bought.

    PS I agree with Dean that allowing funds to be moved between life assurance bonds without creating a chargeable event would be a great idea.

  3. Chris Sier ….. “Transparency Champion” …

    Never seen him before ?

    Well done !! and I salute you

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