Consumer bodies warn FCA on tackling fund group failings

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The FCA has been urged to confront the asset management sector and not dilute its approach to boosting competition among fund groups ahead of its final report on the sector.

The regulator is set to publish the final report on competition in the asset management industry on 28 June. It follows its damning interim market study in November, which called for improved charges transparency and better communication with clients.

The Financial Inclusion Centre director Mick McAteer argues “the big fear” is that the FCA’s focus on transparency will not be enough to resolve the various market failures identified in the interim report.

He says: “The FCA is clearly looking at how to present fund charges but I don’t know how far it’ll go. Asset managers should be required to bear all the costs of investing and charge a single fee, but I don’t think the FCA will go as far as that.”

Fairer Finance managing director James Daley argues the FCA is not “in the mood” for naming and shaming firms, saying the regulator has been much less “confrontational” after the departure of former chief executive Martin Wheatley.

He says: “We are likely to see additional disclosure requirements on fees and charges and the interim paper seemed to support there will be prescription. But, if you leave it too broad, you’ll probably end up with asset managers all doing different things.”