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Rathbones warns focus on FCA audit trail may lead to client neglect


Over-regulation risks creating an asset management industry where client outcomes are being neglected in favour of forming a robust audit trail, Rathbones has warned.

Rathbone Unit Trust Management chief executive Mike Webb says between the FCA’s Asset Management Market Study, Mifid II, product governance regulation and Priips, the “sequence of change” was accelerating.

Webb says: “My big fear for the industry is that we have stopped looking at the interests of the end customer and started looking at creating an audit trail that allows us to make excuses for what we do if something goes wrong.”

Speaking at an industry dinner last night, he warned that a focus on “consumerist issues” was taking precedent at the FCA over investor outcomes.

“Let’s bear that in mind with the FCA and what its intentions are because my gut feel is that regulation is looking at the short-term ability to deal with consumerist issues as opposed to looking at the long-term outcomes for investors. We need to be aware of regulation that is put in place without looking at the unintended consequences.”

Elsewhere, Webb believes Brexit negotiations will take as long as 10 years before a sense of certainty is established.

He says the only way to navigate such a volatile geopolitical backdrop is by investing in actively managed funds run by managers with long-term courage in their convictions and a robust investment process.

“The only time that things go wrong is when you want get fund managers chasing performance and chasing markets and we are going to see a lot more of that happening in next few years.”



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  1. Over-regulation did this to advice years ago, this is just spreading the love…

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