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UK FCA Consults on Preliminary Findings of its Asset Management Market Study

In 2016 United Kingdom Financial Conduct Authority undertook a study of the asset management market to assess whether retail and institutional investors get value for money when buying asset management products and services. The FCA published the following interim findings in November 2016:

  • There is minimal price competition in a number of areas of the asset management industry.

  • There is stronger competition on price for passively managed funds. However, the FCA did still find some examples of poor value for money in this segment.

  • Firms operating in the market have seen sustained high profits over a number of years despite the large number of businesses in the sector.

  • There are concerns about the way the investment consultant market operates.

  • Investors do not always understand the underlying objectives of funds.

  • Fund performance is not always reported against an appropriate benchmark.

The FCA has proposed a significant package of remedies to promote positive competition and protect those least able to engage actively with their asset manager. Suggestions include:

  • Enhanced duties on asset managers to act in the best interests of investors.

  • Reforms to subject asset managers to greater accountability.

  • Introducing an all-in fee to provide investors with greater visibility of assets being removed from the fund.

  • Tools to assist retail investors with identifying the most appropriate fund for them.

With nearly £7 trillion being managed by the UK asset management industry, and over three quarters of UK households with occupational or personal pensions using asset management services, these findings and potential remedies are important and have wide-reaching effect. Interested stakeholders have until 20 February 2017 to provide the FCA with their thoughts.

The FCA will publish its final report and remedies in 2017. Firms providing asset management services will be alive to the fact that their business models may be subject to yet more scrutiny and customer friendly changes in the not too distant future.

© Copyright 2019 Squire Patton Boggs (US) LLP

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About this Author

Partner

Chris Webber specializes in resolving financial services disputes and regulatory investigations. He represents clients including banks, broker dealers, corporate trustees, bondholders, issuers, mortgage servicers, borrowers, insolvency office-holders, regulatory bodies, investment funds, and individuals. He also acts for corporate clients in contractual, investment, and shareholder disputes.

+44 20 7655 1655
Mariyam Harunah Debt Recovery Attorney Squire Patton Boggs
Associate

Mariyam regularly acts for a diverse client base, including, SMEs, FTSE 100 and 250 corporations, public bodies, developers, insurers and individuals.

Mariyam has experience advising on a wide-range of matters of both a contractual and tortious nature, including breach of contract, breach of warranty, misrepresentation, defamation, professional negligence, debt recovery and insurance.

Experience

  • Assisting on an approximately £160 million multi-action and multi-defendant claim following the sale of a company to investor clients.

  • Acting on a variety of disputes for clients seeking the recovery of unpaid monies owed pursuant to contract.

  • Acting on a portfolio of financial mis-selling claims for a leading international bank.

  • Advising a variety of clients upon termination of contract issues.

  • Acting for industrial manufacturers and suppliers in the defence of contractual and tortious disputes with technical complexities, arising out of the provision of allegedly defective products.

  • Assisting in the provision of bespoke and strategic advice to a national regulator dealing with persistent defamation and harassment.

  • Acting for a leading hire purchase provider in enforcement proceedings.

  • Assisting on a £500,000 negligence claim by a leading supermarket arising out of property damage and business interruption at one of its warehouses.

44 121 222 3175