FCA to pull back from fund manager charge cap

FCA logo new 3 620x430The FCA is set to stop short of imposing a fund management charge cap as part of its asset management review.

The regulator began its review of competition in the fund management industry in November, and is assessing how fund groups deliver value for investors.

The FCA has been considering whether to introduce a ceiling on annual management charges, but the Sunday Times reports this is no longer the case.

The newspaper cites City sources that say the regulator has been steered away from introducing a fee cap, believing that this alone would not prevent investors from overpaying.

One source told the newspaper: “Fund managers have been terrified of a fee cap since the FCA was created. These are people with big mortgages, cars and extravagant lifestyles. A cap means lower salaries and bonuses. This keeps them up at night.”

After delaying its initial findings from the summer to later this year, the FCA plans to publish its final report next year.

Last month Fund Strategy’s sister publication Money Marketing revealed through a freedom of information request that the FCA has so far spent over £1m on carrying out the asset management review.