The FCA published its final policy changes on Thursday, introducing new rules forcing fund managers to ensure their products provide value for the end investor.
Miller criticises the regulator’s failure to respond to “flagrant breaches and potentially illegal activity” by firms regarding fees and charges disclosure required under Mifid II.
She says: “It is shocking how long it has taken the FCA to achieve nothing more than restating the obvious.
“They have dealt with important but relatively minor negative industry malpractices, such as box profits, but not the substantive issue of misleading fees through the various distribution channels.”
SCM Direct estimates that the failure by the FCA to enforce the costs and charges provisions within Article 24 of Mifid II is costing UK consumers between £903m and £3.3bn per annum.
Miller says SCM Direct has sent a 90-page dossier to the FCA detailing industry-wide noncompliance with Mifid II.
She says: “Kicking the issue into the long grass yet again, is an indictment of an industry and regulator that both refuse to protect consumers.
She adds: “The FCA cites the work being done by the Institutional Disclosure Working Group but this is only for institutional investors. Ordinary consumers continue to be treated as second class citizens by the FCA and industry.”
Miller says evidence compiled by SCM suggests several FCA-regulated firms may have committed a criminal offence of “misleading statements and impressions”.
SCM has written to the FCA requesting an immediate investigation into firms it alleges are not compliant with Mifid II.
It has also asked the FCA to set up a retail taskforce to ensure that an industry-wide mandated common costs and charges template is implemented by 1 September.
Miller says SCM Direct will consider “legal remedies including seeking a Judicial Review” if the FCA fails to confront firms allegedly breaking Mifid II rules.
The regulator also launched a further consultation asking groups to give feedback on how they can improve the way they communicate fund objectives to clients.
While the market study has been warmly greeted by most of the industry, there are fears the new rules could force up costs for fund groups.